Nigerian airlines battle to keep flying over fuel cost hikes

Nigeria’s airlines say they are struggling to keep flying because the price of aviation fuel in the West African country has increased by 260%

ABUJA, Nigeria (AP) — Nigeria's airlines say they are struggling to keep flying because the price of aviation fuel in the West African country has increased by 260%.

The country's six airlines said they will continue domestic and regional flights thanks to a pledge by federal government officials to engage institutions that will “provide succor” to the airlines to help offset their skyrocketing fuel prices which now constitute 95% of their operating costs, the airlines said in a statement Sunday.

The Airline Operators of Nigeria had planned to protest the fuel increases by suspending local and regional flights but some of the airlines objected to the planned shutdown.

International crude oil prices have increased 40% since the beginning of the year, due to a combination of factors including Russia's war in Ukraine.

Nigeria, a country of more than 200 million people, has been badly affected. Despite being Africa's largest producer of crude oil, it still imports most of its fuel because it has very few functional refineries.

Its jet fuel prices have risen so high because it “imports 100% of its aviation fuel” which is then transported by the road leading to high distribution costs, said Sindy Foster, a Lagos-based aviation expert.

“It is also likely to be a foreign exchange issue. We don’t have a stable currency and most imports are only accessible by obtaining foreign exchange on the black market,” said Foster, a principal managing partner at Avaero Capital Partners.

Nigeria has seen a “steady and astronomical hike” in the price of aviation fuel, or Jet A-1, with a liter currently at 700 naira ($1.7) up from 190 naira ($0.4) at the beginning of the year.

“No airline in the world can absorb this kind of sudden shock from such an astronomical rise over a short period,” the airlines association said. It said the rising fuel prices would cause ticket prices to go up by more than 100% but said such increases “cannot be fully passed to passengers who are already experiencing a lot of difficulties.”

The situation has already forced Nigerian airlines to delay and cancel flights more frequently.

With the trend of armed gangs abducting people traveling by road and on trains, particularly in its troubled northern region, many people are choosing to take airplanes. The volume of air traffic in the country jumped by 43% in 2021, according to the Nigeria statistics agency.