Nigerian Airlines Caught in Pricing Dilemma Amid Jet Fuel Price Spike

Nigeria’s aviation sector is grappling with a fresh wave of uncertainty as a sharp increase in jet fuel prices forces domestic airlines into a difficult situation.

Industry analysts observe that while the cost of aviation fuel (Jet A1) has skyrocketed by over 100 percent in recent times, domestic airlines are struggling to raise ticket prices proportionally due to intense competition and a significant drop in passenger purchasing power. In other words, the airlines are faced with tough options: raise ticket fares and risk losing passengers, or absorb the costs and face mounting financial strain.

Aviation fuel, also known as Jet A1, which accounts for over 40 per cent of airline operating expenses, has surged dramatically following the hike in price of crude oil in the global market (oil has risen above $100 per barrel) in the last one month. The price surge has been attributed to the ongoing conflict in the Middle East involving the United States, Israel and Iran, which has caused disruption of global oil and gas supply, especially through the Strait of Hormuz.

Jet A1 has soared to an average of ₦2,800 across the country as of March ending, from about ₦900 per litre sold in January 2026.

For many Nigerian carriers, the impact has become severe.

“We are operating in survival mode,” a staff of one of the airlines who preferred to be anonymous stated in a chat with Pinnacle Daily. “Fuel alone now takes up to 40–50 percent of our total operating costs. There’s only so much we can absorb before it becomes unsustainable.”

The Pricing Dilemma

Despite these costs, domestic airfares have remained relatively stagnant compared to the fuel price spike. As of early April 2026, most one-way tickets on major routes ( such as Lagos–Abuja) are still selling between ₦106,000 and ₦147,000.

A check on the United Nigeria Airlines portal reveals that the flight from Lagos to Abuja on Monday, April 6, goes for ₦150,000. However, its price schedule shows a drop to ₦142,500 from April 7 up to April 20, 2026. 

Air Peace sold tickets for the same route at ₦147,000 on April 6 and ₦137,500 for flights from April 7 up to April 21.

Aero Contractors fixed the price of its tickets at ₦202,000 on Monday, April 6,  ₦174,368 on Tuesday, April 7, ₦153,888 on Wednesday, April 8, ₦137,512 on Thursday, April 9 and ₦123,127 on Friday, April 10. This is slightly higher than about ₦106,000 that tickets were sold for Lagos to Abuja before the Easter season. Further checks on the schedule reveal a return to the price before the season. 

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Despite the slight increase in fares due to demand in the Easter season, analysts believe that it is not commensurate with the current high cost of aviation fuel.

Aviation analysts and the Secretary-General of the Aviation Roundtable, Olumide Ohunayo, said any adjustment in ticket prices by the airlines is not sufficient to offset the rising operating costs due to the high cost of fuel. 

According to him, “Whatever increase they can make now, they may not be able to recoup their losses as a result of the fuel price increase.” 

He observed that the fuel price in Nigeria is on the high side when compared to other countries.

Airlines face a delicate situation. Raising fares too aggressively could push travelers toward alternative transport, particularly in a price-sensitive market. Yet holding fares steady risks eroding already thin profit margins in an industry historically plagued by high operating costs and limited access to financing.

Airline Operators of Nigeria (AON) recently lamented that Nigerian carriers are bleeding cash and flying at a loss as the ongoing Middle East conflict has pushed up aviation fuel prices.

Speaking in an interview on Arise News TV, AON spokesperson, Prof. Obiora Okonkwo, said Nigerian airlines are currently losing money because, according to the Nigeria Civil Aviation Authority (NCAA) regulations, airlines can’t unilaterally raise ticket prices as they are required to submit their inventories to the NCAA for review before implementation of any price increase is considered.

Okonkwo said that in the meantime, airlines continue to operate at a loss, adding that the period, shortly after the Christmas season, is usually not the highest season for air travelers as passenger load drops to about 40 or 60 per cent.

“So, we are really in a very difficult situation right now. You can’t just wake up and say, I’m doubling or tripling my fare despite the aviation fuel new price hike,” Okonkwo stated. 

“Today, you can still buy tickets to some destinations at 100,000 naira plus. So, this is that moment that when I tell Nigerians that there are occasions the airlines fly and lose money, this is that moment we are carrying you at our own expenses,” he added.

The AON spokesperson, who is also the chairman of United Nigeria Airline stressed that while airlines look forward to ticket price adjustment, they are also sensitive to the economic situation of Nigerians and travellers.

Reports indicate that Nigeria’s passenger traffic has been on a steady decline in recent years. In 2022, the industry recorded 16.2 million passenger movements on domestic and international routes in 2022, 15.8 million in 2023, and 15.6 million in 2024.

Okonkwo called on the government to have a special arrangement with Dangote Refinery on crude supply to enable airlines to get jet fuel at an affordable rate.

Industry analysts warn that without intervention, the situation could lead to reduced flight frequencies, route cuts, or even airline shutdowns.

“We may begin to see consolidation in the sector if smaller carriers cannot withstand the pressure,” said aviation analyst Tunde Adeyemi. “The economics simply do not support prolonged losses.”

Public affairs commentator, Adewale Adeoye, said the airlines may become bankrupt after some time if nothing is done to cushion the rising operating cost due to the fuel price spike.

Some stakeholders are calling for government support, including tax relief, improved access to foreign exchange, and policies aimed at stabilizing fuel supply. Others argue that structural reforms are needed to address long-standing inefficiencies in Nigeria’s aviation ecosystem.

The federal government has previously pledged to support the sector, recognizing its importance to national connectivity and economic growth. However, concrete measures have yet to fully alleviate the current crisis.

Meanwhile, passengers and airlines alike remain caught in a cycle of uncertainty.

One of the leading carriers, Air Peace, had last week attributed flight delays and baggage limitations to the shortage of aviation fuel in Nigeria.

In a statement signed by Air Peace spokesperson Osifo-Whiskey Efe, the airline linked the disruptions to the soaring jet fuel prices in Africa, driven by global supply chain issues. 

As jet fuel prices remain high, Nigeria’s aviation industry faces a defining test—one that could reshape how airlines price their services, manage costs, and ultimately survive in a challenging economic climate.