…high cost of commodity drains airlines’ meager profit
By Sade Williams
Alhaji Muneer Bankole, managing director, Medview Airline has said that the company in the last five years, spent over N22 billion on aviation fuel, also known as Jet-A1.
Speaking at a press conference in Lagos, he said the high cost of aviation fuel in Nigeria was depleting airlines’ little profit adding that the airlines were at the receiving end of all the bureaucracies the commodity go through before being sold to operators.
While lamenting the skyrocketing prices of the commodity in Nigeria, Bankole said the issue is worst in the North where the marketers flee for security reasons.
“We now buy a litre at N220 in Lagos but up in the North in places like Maiduguri, it is about N260, that is the unfortunate situation we have found ourselves”, he said.
The perennial shortage of aviation fuel has become a big clog in the wheel of domestic airlines as they find it difficult to operate smoothly like their counterparts.
The price of the product is critical to an airline and also considering the fact that fuel consumption amounts to about 30 percent of the cost of operation for an airline, there is need to quickly nip the problem in the bud.
But from series of meetings by airline operators with government and fuel markers officials to government setting up committees to look into the issue over the years, there seems to be no end to the impasse in air travel being created sometimes as a result of scarcity or high cost.
It is obvious that if the product is refined in Nigeria, the problem will not be there but as it appears that government seems not to be interested in the way the airlines operate, the operators gallivant from one neighbouring country to another to get fuel even at cheaper prices than they get in Nigeria.
And so Bankole lamented that the harsh environment where domestic airlines are forced to operate coupled with other overheads, make it difficult for them to compete with their foreign counterparts that are fully subsidized by their governments.