Aviation professionals under the umbrella of the Aviation Safety Round Table Initiative have criticised the Federal Government’s reported N60bn invoice discounts to airlines, describing the intervention as ineffective and incapable of addressing the worsening challenges confronting Nigeria’s domestic aviation sector. The group said despite the huge financial concession granted to operators, there had been no corresponding reduction in the price of Jet A1 aviation fuel, airline indebtedness, or passenger fares, leaving both airlines and air travellers struggling under the weight of rising operational costs. Speaking through a statement on Monday, President of the aviation professional group, Air Commodore (retd.) Ademola Onitiju, stated that Nigeria’s domestic aviation industry remained trapped in a prolonged crisis driven largely by the soaring cost of aviation fuel, which currently sells for between N1,650 and N2,037 per litre. Recall that recently, when operators complained about what they described as the unbearable cost of aviation fuel, the Federal Government, through the Ministry of Aviation and Aerospace Development, conceded 30 per cent of the airlines’ debt with a view to cushioning the effect of the fuel price on their businesses. This debt reduction, professionals say, was put at N60bn. According to Onitiju, fuel now accounts for almost half of airlines’ operating expenses, forcing carriers to increase ticket prices beyond the reach of many Nigerians. “The Nigerian domestic aviation sector currently faces a profound and protracted crisis driven primarily by the escalating cost of Jet A1 fuel. This single factor has pushed fuel to nearly half of total airline operating expenses and has forced domestic carriers to raise fares to levels that many Nigerians can no longer afford,” he said. Onitiju argued that the government’s N60bn intervention failed to deliver any meaningful impact on the aviation value chain. He emphasised, “Rather than frontally tackle this urgent challenge, the Federal Government has already given away N60 billion in invoice discounts to airlines with no measurable benefit to the industry or the travelling public. “The defects are palpable. Jet A1 prices have remained unchanged. Airline debts have not reduced. Neither have we seen passengers enjoy cheaper fares. The cargo logistics, tourism and hospitality sectors have not experienced growth. The aviation ecosystem—airlines, agencies, concessionaires and ground handlers—received no structural relief from that hollow N60bn largesse.” To address the crisis, the aviation body proposed what it described as a Fuel-for-Stability Programme, which would involve the direct allocation of crude oil to local refiners specifically to support domestic airlines through lower fuel prices. “The Aviation Safety Round Table Initiative has therefore recommended a more effective and fiscally responsible alternative. The proposal seeks to focus exclusively on domestic operators through the allocation of crude oil directly to local refiners. “This Fuel-for-Stability Programme eliminates the N60bn waste, reduces government cost exposure and creates a stable fuel-pricing structure that immediately transforms the economics of the sector,” Onitiju explained. He stressed that the objective was not necessarily to achieve a particular fuel price benchmark but to create a predictable supply chain capable of reducing costs and stimulating growth. “Whether the final feasible fuel price is N300 or slightly above is not the issue. The grand strategy is to emplace a stable, predictable supply of crude to local refiners in order to dramatically lower operating costs, enable lower fares, higher passenger traffic, more profitable airlines, stronger aviation agencies and a healthier fiscally backed ecosystem.” The aviation expert further argued that affordable air transport would unlock broader economic opportunities and expand access to aviation services for millions of Nigerians. “Lower air fares are not restricted to consumer benefits; they are catalysts for market expansion, passenger traffic growth, higher load factors and the economies of scale that make the business of commercial aviation sustainable. “A nation of over 220 million people should not continually operate an aviation market accessible only to a narrow segment of its population. Reduced airfares will result in a natural expansion of the market and sustainable sectoral growth,” he said. Referencing other countries, Onitiju said governments that successfully transformed their aviation sectors focused on affordability and long-term structural reforms rather than temporary interventions. “This approach is pragmatic and not theoretical. India achieved some of the lowest domestic fares in the world and explosive traffic growth by stabilising fuel supply and prioritising structural reforms. “Turkey, Indonesia and Brazil also transformed their aviation sectors by focusing on affordability, volume growth and ecosystem-wide efficiency, not piecemeal interventions that deliver no lasting value.” While acknowledging efforts by the current administration to restore confidence among global aircraft lessors and support local aircraft maintenance capabilities, the ASRTI president insisted that more deliberate policies were needed to drive sustainable growth. He further stated, “We have on many occasions lauded the efforts of the present administration to restore global aircraft lessors’ confidence in Nigeria’s aviation sector, including the bold aim of localising aircraft maintenance and availability. “However, the government has to be deliberate in its policies to grow the aviation sector in order to catalyse national economic growth. Deliberate market-shaping policy reforms will result in making flying a mass-market activity in Nigeria and enhance its global competitiveness.” Source – Punch
