Airlines seek government’s intervention on fuel, charges

An airliner being fueled

An airliner being fueled

Airline operators in the country have again cried out to the Federal Government to see to their plight in the area of aviation fuel and multiple charges levied by the regulatory agencies.

The operators, who claimed to be at the mercy of both the fuel marketers and regulators, said a proper review of both fuel cost and multiple charges would enable the airlines survive the current financial distress.

It would be recalled that aviation fuel, otherwise called Jet-A1, is 100 per cent imported into the country and subject to the vagaries of the foreign exchange (forex) market.

While the industry has over the years struggled with supply shortage, the recent spike and scarcity in the forex market have more than doubled the pump price of aviation fuel.

The product currently sells for N204 per litre in places like Lagos and Abuja. Same product goes for about N240 per litre in the northern part of the country.

Aviation fuel alone account for about 30 per cent of the total operating cost of an airline, of which some airlines are heavily indebted to marketers.

Chief Executive Officer (CEO) of Med-View Airlines, Muneer Bankole, said effective price control of the product is most imperative to alleviate the financial difficulty faced by the airlines.

Bankole said: “Jet-A1 remains very crucial to the aviation sector and we have said it severally. At the beginning of this administration we thought they were going to create a window in one of the refineries to get this product and bring down exposure of dollars.

“Today, fuel is at the mercy of the marketers. They are selling now at N204. In January last year, it was N101 per litre and some were selling at N98. Today it is N204 and up to Maiduguri and Yola, it can go as high as N240 because the fuel marketers claim that they are looking for dollar to get the product in for us.

“We have spoken with the minister and he has been moving around with us on this journey. We expect lot more to be done in the area of fuel,” he said.

Stakeholders have consistently called on the Federal Government to refine the product locally. Apparently in response, the Minister of State for Aviation, Hadi Sirika, recently hinted that the Kaduna refinery would be dedicated to refining of aviation fuel. Nothing has been heard about the project since the pronouncement.

Chairman of the Airline Operators of Nigeria (AON), Capt. Nogie Meggison, said recently that consistent shortage of the product for airlines to conduct their operations led to reduction in operations by 50 per cent.

Meggison said: “We have been forced to cry out about the perennial problem at this juncture because it continues to put us in a difficult situation to go an extra mile to fulfill our obligations to our esteemed customers in spite of the inconveniences that go with it.

“However, we are at the mercy of the oil marketers and many times our hands are tied such that we are left with no other option than to cancel flights,” he said.

In the area of alleged multiple charges, Bankole said that the charges, some of them frivolous, have continued to over-burden the operators, leaving the airlines in dire straits.

He said in ideal settings, all the five agencies of government would have a single pocket, while the regulatory authority among them shares the proceeds.

“This is because the rest are just service providers. They collect their landing and parking charges among others. The truth is that we are in very difficult situation. We pay Federal Inland Revenue Service (FIRS), Lagos Inland Revenue Service (LIRS) and others. It is all about paying and we have no money left.

“We will not be tired of saying this. Government must change its attitude and support the aviation industry because it is the only window through which the government can speak to the external world. Most of the corporate entities in this country cannot fly your name like the airlines will do,” Bankole said.

Coordinator of the Nigeria Aviation Safety Initiative (NASI), Capt. Dung Pam, noted that there are no fewer than seven categories of charges levied by the regulatory agencies, some of which are still meaningless.

Apart from the Value Added Tax (VAT), Passengers Service Charge (PSC), there are air bridge charge, Common Users Terminal Access charge, rent, power users charge and so on, all on the airlines.

In this article:
aviation fuelMuneer Bankole

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