The decision by the Airline Operators of Nigeria (AON), to suspend flight operations in the aviation sector on Monday 9, 2022, over the rising cost of Jet A1 from N190 per litre to N700 about 95%, may not have been totally accepted by operators in the sector.
Ibomair has issued a statement distancing itself from the decision to stop fFlights on Monday. Out of the 10 Airlines in Nigeria Green Africa did not sign the initial statement and now Ibomair has come out formally to deny the shutdown agreement.
Ibomair was left out of the Covid19 palliatives shared to AON members so their current independent action seems to be consistent with their relationship with AON.
The AON in a statement had said the association has carried on deploying and subsidizing their services to the Nigerian flying public in the last four months despite the steady and astronomical hike in the price of JetA1 and other operating costs.
It stated that no airline in the world can absorb the kind of sudden shock from such an astronomical rise over a short period. While aviation fuel worldwide is said to cost about 40% of an airline’s operating cost globally, the present hike has shut up Nigeria’s operating cost to about 95%.
It said: “Overtime, aviation fuel price (JetA1) has risen from N190 per litre to N700 currently. No airline in the world can absorb this kind of sudden shock from such an astronomical rise over a short period.
“While aviation fuel worldwide is said to cost about 40% of an airline’s operating cost globally, the present hike has shut up Nigeria’s operating cost to about 95%. In the face of this, airlines have engaged the Federal Government, the National Assembly, NNPC and Oil Marketers with the view to bringing the cost of JetA1 down which has currently made the unit cost per seat for a one hour flight in Nigeria today to an average of N120,000.
“The latter cannot be fully passed to passengers who are already experiencing a lot of difficulties. While AON appreciates the efforts of the current government under the leadership of President Muhammadu Buhari to ensure air transport in Nigeria grows, unfortunately, the cost of aviation fuel has continued to rise unabated thereby creating huge pressure on the sustainability of operations and financial viability of the airlines. This is unsustainable and the airlines can no longer absorb the pressure.
“To this end therefore, the Airline Operators of Nigeria (AON) hereby wishes to regrettably inform the general public that member airlines will discontinue operations nationwide with effect from Monday May 9, 2022 until further notice.”
Meanwhile, Ibom Air, one of the operators in the sector, despite appending its signature to the agreement to halt flight operations, said it will continue to fulfilling its obligations to its teaming customer who had already bought the airline’s ticket ahead.
The airline said it acknowledges the existential threat that the runaway fuel price increases pose for the air transport industry in Nigeria, adding that airlines volunteering to stop operations would rather exacerbate an already bad situation.
“Ibom Air acknowledges the existential threat that these runaway fuel price increases pose for the air transport industry in Nigeria. We agree that this out-of-control situation is simply unsustainable. However, every airline has its unique business model and pressures. We believe that in spite of the escalating fuel prices, airlines volunteering to stop operations would rather exacerbate an already bad situation.
“Ibom Air has financial obligations to suppliers, financiers and staff, which depend on uninterrupted flow of revenue to service. More importantly is the fact that having been paid by customers in advance for flight bookings we are bound by contract to deliver the services already paid for, to avoid exposing the airline to the risk of avoidable litigation.
“Apart from the above factors, Ibom Air is currently the only airline serving Akwa Ibom State directly and as such, any voluntary stoppage of operations would completely cut off access by air into and out of the State. Such action would be directly in conflict with and detrimental to the interest of our shareholder.
“In view of the foregoing facts, Ibom Air had respectfully disagreed with the decision of AON to suspend flight operations on Monday 09 May 2022. Ibom Air cannot in the circumstance volunteer to stop operating and will continue normal operations on Monday 09 May 2022 and beyond. Ibom Air’s inclusion as “signatory” to the statement released by AON must have derived from its active and committed membership of the AON.
“The above notwithstanding, we identify very strongly with our AON colleagues and will participate in every effort to resolve this frightening situation as soon as possible in the interest of our business, our customers, our stakeholders and our country.
“We thank our customers for their continued patronage and we thank the AON for our collective efforts to secure a sustainable fuel pricing regime for the airlines” it said.
It will be noted that, Startup carrier, Green Africa Airways signature was not on the press statement release by the Airline Operators of Nigeria.
Furthermore, the Federal Competition and Consumer Protection Commission (FCCPC), has urged the airline operators to reconsider their decision to halt flight operations in the country noting that it will bring more hardship to the public.
The commission said: “The commission encourages and implore domestic airlines to consider the effect of the proposed shutdown on passengers and the magnitude of the difficulties and hardship associated with such an action.
“The commission does not trivialise the disruption and potential challenge to business continuity and survivability an inordinately high cost of jet fuel presents to domestic aviation, especially coupled with other rising cost of operations and foreign exchange.
“Indeed the commission has been in discussion with the leadership of major fuel marketers to understand the global supply challenges and possible steps to ameliorate same.