Nigerian airlines have raised their minimum airfares to as high as ₦200,000 for one-way domestic tickets as the persistent hike in aviation fuel, also known as Jet A1, continues to affect operations.
Routes such as Lagos–Abuja, Lagos–Port Harcourt, and Lagos–Enugu now commonly exceed ₦200,000 for one-way economy tickets on several carriers.
The high cost of aviation fuel has forced domestic carriers to abandon their months-long strategy of absorbing operational losses.
Major domestic carriers, including Air Peace, Ibom Air, and United Nigeria Airlines, have been lamenting mounting financial pressure on their operations. They say fuel expenses now account for more than 50 per cent of operational costs, making many routes barely profitable.
Pinnacle Daily’s Checks across online booking platforms of various domestic airlines revealed that most of them have increased ticket prices for various routes.
While United Nigeria fixes its flights at a minimum of ₦200,000, Ibom Air and Max Air set their ticket prices at ₦201,000. Air Peace is charging slightly higher at ₦203,000 and above for Economy class tickets for Lagos to Abuja flights.
However, some airlines still kept prices below ₦200,000 as at the time of this report. A check on the Aero Contractors’ portal reveals that it is still charging ₦130,000 and as high as ₦175,000 on a one-way Economy ticket for Lagos to Abuja flights. Similarly, Arik Air is also still offering its tickets between ₦114,000 and ₦1,52,000 for one-way Economy class, depending on the day and flight time.
The increase comes at a time when the Dangote Refinery announced a slash of its ex-depot price of aviation fuel from ₦1,750 down to ₦1,650 per litre.
Despite the price cut by the refinery, airlines still buy aviation fuel above ₦2,000 – as high as ₦2,800 per litre, at some airports across the country, putting additional pressure on operators.
Earlier, airline operators had reported buying aviation fuel above ₦3,000 per litre, which was an increase of about 300 per cent from ₦900 per litre sold a few months ago.
The surge was attributed to the geopolitical tensions in the Middle East, which caused disruption of global oil and gas supply with the closure of the Strait of Hormuz, where about 20 per cent of the world’s oil and gas products pass daily to other parts of the world.
The disruption has pushed up crude oil prices above $100 per barrel, consequently affecting fuel prices (including petrol, diesel and aviation fuel) in domestic markets.
Ibom Air, had in a statement last month, reported that the cost of fuelling a single flight rose from ₦2.1 million in January to approximately ₦7.6 million by late April, a more than 350 per cent increase.
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Operators have stated that the airlines have been effectively “subsidizing” travelers for months by absorbing losses rather than passing on the full cost to passengers. With cash flow drying up and debts mounting, operators warn that the current situation is financially unsustainable, hence the need for fare adjustment.
Capacity Reductions
Prior to raising fares, some airlines began reducing flight frequencies to cope with the costs. Air Peace, Ibom Air and some other domestic carriers had at different times announced cuts to their schedules in April, warning that further reductions might be necessary to stay afloat.
Earlier this month, Rano Air announced a temporary suspension of flights on some routes due to ongoing fuel supply challenges.
Government Response
Following concerns raised by Airline Operators of Nigeria (AON) and the threat of shutting down operations in April, the Federal Government had responded. The Minister of Aviation and Aerospace Development, Festus Keyamo, appealed to airline operators not to hike fares, warning that such action would impose “significant hardship on the travelling public.
He subsequently convened a stakeholders’ meeting, bringing together airline operators and fuel marketers to seek a “sustainable resolution” to the crisis. Some of the measures proposed to manage the crisis included a 30 per cent debt relief package for airlines, engagement with fuel marketers to curb artificial price hikes, temporary jet fuel price benchmarks, and allowing airlines to buy fuel on credit.
Despite these interventions, aviation analysts say broader issues still affect Nigeria’s aviation sector
The airlines said the 30 per cent cut on their debt to aviation agencies was not enough and called for a total waiver until the fuel price drops to a considerable level. They also requested to have one-on-one interaction with the president to highlight their challenges and come up with recommendations on the way forward to make the country’s aviation industry more viable.
Aviation analyst Olumide Ohunayo stressed the need for authorities to address the underlying causes of the high cost of aviation fuel.
Victor Ezeja is a passionate journalist, scholar and analyst of socioeconomic issues in Nigeria and Africa. He is skilled in energy reporting, business and economy, and holds a master's degree in Mass Communication. He can be reached via @VICTOREZEJA on X