Founder of Air Peace, Allen Onyema, has projected that more airlines in Nigeria will continue to crumble if the issues of taxation and high aviation fuel costs are not addressed.
He stated this in an interview on Arise TV where he revealed that the price of aviation fuel (jet A1) has increased by more than 250 percent from about N900 per litre to as high as N3,300.
According to him, airlines were now borrowing billions of naira to purchase aviation fuel as the cost of the commodity continues to rise.
He pointed out that a flight that previously required about N3 million worth of fuel now requires between N12 million and N13 million worth, making it difficult for operators to remain profitable.
The Air Peace boss said Nigerian airlines face additional pressure from high borrowing costs, with interest rates ranging between 29 percent and 33 percent, compared to the 3 percent to 4 percent rates available to airlines in many Western countries.
Onyema, who is also the vice-president of the Airline Operators of Nigeria (AON), praised airlines for their resilience, saying despite the difficult operating environment, local carriers have continued to provide “real services” across the country.
“No Nigerian airline is smiling now. Thanks to the banks that believe in the aviation industry. We have all borrowed and borrowed billions just to buy fuel alone and fly. We just fly for the fuel vendors.”
“The Nigerian airline is actually dead-on arrival, and many of us, including Air Peace cut down the number of flights we do in order to save costs,” he added.
The airline founder also blamed the aviation fuel distribution chain for rising costs, saying the problem was not with fuel supplied by Dangote Refinery, but multiple layers of middlemen inflate prices before the product reaches the airlines.
He noted that over 70 airlines have collapsed in Nigeria and that the country has one of the highest airline mortality rates globally.
Onyema also criticised the 5 percent ticket sales charge (TSC) imposed by the Nigerian Civil Aviation Authority (NCAA), describing it as burdensome for operators.
“…if those charges are not reviewed, airlines will continue to crumble in this country,” the he said.
