Despite FX Stability, Jet Fuel Supply, Domestic Airlines Face Shrinking Market

Nigerian airlines are grappling with a shrinking market despite stable foreign exchange rates and a reliable supply of aviation fuel, according to a THISDAY investigation. While the cost of jet fuel has stabilized due to the Dangote Refinery, airlines argue that high airfares are not sufficient to cover their operational costs, leading to a lack of profitability.

The Managing Director of Aero Contractors, Captain Ado Sanusi, attributes this to limited capacity, stating that the fares are relatively high but do not reflect the actual market price. He suggests that airlines could potentially lower fares if they had more aircraft and seats available, as well as serving all domestic routes. However, some routes are being serviced inadequately, particularly in the northern and southeastern parts of the country.

Meanwhile, the CEO of United Nigeria Airlines, Chibuike Uloka, complains about the persistently high aviation fuel prices, which he claims are not reflected in the fares charged by airlines. Uloka also accuses oil marketers of creating artificial scarcity to sell their product at exorbitant prices. Additionally, the Chairman of Ndano Energy, Chris Ndulue, points out that jet fuel is currently being sold below N2000 per litre, but marketers often hold back a portion of the payment, causing delays in supply to airlines.