Nigerian airlines have chosen not to raise fares during the Easter holiday, even with aviation fuel prices skyrocketing from N995 per litre in January to between N2,700 and N3,000 per litre, as recent investigations reveal.
Captain Ado Sanusi, the Managing Director and CEO of Aero Contractors, explained that the airline assessed the situation regarding fare increases due to the surge in aviation fuel pricing and concluded that any increase would render ticket prices too costly for travelers.
Furthermore, he indicated that around 60 to 70 percent of ticket sales for the holiday had already been made prior to the Easter celebration, influencing their decision.
"Consequently, we opted to maintain our prices in order to sell all available seats, thereby minimizing losses, although we will eventually have to raise fares," he stated.
Sanusi also noted that the rise in diesel prices, impacting some of their operations, compounded the challenges facing airlines. He assured stakeholders that fare increases would be approached strategically rather than drastically to avoid deterring passengers.
In a related statement, Chibuike Eloka, spokesperson for United Nigeria Airlines, affirmed that airlines have refrained from adjusting ticket prices to mirror the steep increase in fuel costs—over 100 percent attributed to ongoing geopolitical conflicts.
Eloka remarked that airlines are currently subsidizing operational costs with the expectation that the price of Jet A1 fuel will decrease once the conflict settles. He highlighted that due to lower passenger demand during this period, United Nigeria Airlines did not completely utilize its discounted fare tickets ranging from N95,000 to N150,000.
He cautioned that should airlines reflect current aviation fuel costs in ticket pricing, passengers could be facing ticket prices of up to N300,000 for a one-hour flight.
"We chose not to elevate fares this Easter, unlike last December, and we are using our financial resources to help cover our operational costs. Since the outbreak of the war in Iran at the end of February, ticket prices have surged from N1,200 to N1,700, now escalating between N2,700 and N3,000," he explained.
Eloka further suggested that some fuel marketers may be engaging in hoarding, anticipating further price increases post-holiday, which exacerbates fuel costs.
Efeoghene Osifo-Whiskey, Head of Communication at Air Peace, confirmed the hoarding allegation, illustrating the variance in aviation fuel prices across regions, with prices typically lower in Lagos compared to northern Nigeria.
He expressed skepticism regarding the sustainability of current flight prices if fuel costs remain at the present levels. "While we have not raised fares, discussions about potential increases have taken place, particularly if aviation fuel prices persist in the N2,700 to N3,000 range per litre. Airlines have urged the federal government to reconsider the taxes imposed on them to aid their survival in this challenging period," he said.
In discussions with Chris Ndulue, Chairman of Ndano Energy—a company specializing in aviation fuel marketing—he indicated that without the resolution of the Iranian conflict, there is no forecast for a decrease in aviation fuel prices.
He explained that fuel marketers continue to source supplies while relying heavily on Dangote Refinery, which is presently the primary supplier for Jet A1. Ndulue elaborated on the fluctuations in pricing, noting a substantial hike in operational costs, with industry-standard practices changing from retaining 10 percent of costs to as much as 25 percent, creating volatility in price stability.
"Current prices at Dangote are around N2,600 per litre, and while that may remain steady this week, the unpredictability caused by global conflict adds to uncertainty in the market. The government has sanctioned fuel importation to foster stable and competitive pricing," he said.
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