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

Nigerian airlines are grappling with a contracting domestic travel market, even as foreign exchange rates stabilize and aviation fuel becomes reliably available. This economic downturn has progressively reduced the number of people opting for air travel.

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unlike in the past and also aviation fuel supply is regular but comes at a high price.

Although aviation fuel supply is consistent, its price remains a significant concern. Airlines report that current airfares, while perceived as high by the public, barely cover their operational costs, leaving little room for profit. This financial pressure impacts their ability to expand services or offer more competitive pricing.

Captain Ado Sanusi, Managing Director and CEO of Aero Contractors, highlighted that Nigerian carriers have overcome past challenges like forex scarcity and irregular fuel supply. He attributed the current stable jet fuel supply to the Dangote Refinery's domestic production, which now meets local demand and allows for exports. However, he noted that the high cost of fuel, even with stable supply, is a major factor.

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Aviation fuel prices have stabilised. They have stabilised to a particular price. It is better now than during the war in Iran. I think we are stable because of the Dangote Refinery and they are producing to meet our request and far beyond. So, the refinery can export what it wants to export and still meet the local needs. So, fuel prices have stabilised in the world market.

Sanusi also pointed out that despite the reduced traveling public, many domestic routes remain underserved due to limited aircraft capacity. He suggested that fares could be lower if more aircraft were available and airlines serviced all domestic routes more effectively. Some routes in the north and southeast, as well as West and Central African regions, are not being adequately served by Nigerian carriers, a stark contrast to their past dominance on the West Coast.

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aviation fuel price remained very high at N2000 per litre and he frowned at the fact that airlines do not charge the right pricing for their operation.

Conversely, Chibuike Uloka, Public Relations Officer for United Nigeria Airlines, stated that aviation fuel still costs a high N2000 per liter. He criticized airlines for charging excessively low prices, questioning if these fares reflect operational costs or are used for liquidity generation. Uloka also accused oil marketers of creating artificial scarcity to inflate prices, despite acknowledging that product supply has stabilized for those willing to pay the high rates.

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if you are ready to pay their high prices.