Airlines Record Low Patronage as Cost of Aviation Fuel Soars

Airlines operating in the country have decried the current hike of Aviation Fuel otherwise known as JET A1 stressing that most airlines may be forced to ground their operations, if the situation persists in the coming weeks.
It was gathered by MARKETING EDGE that the price of aviation fuel started going up in the first week of June, 2016 from N115 to between N139 and now N142 per litre.

Some airlines officials contacted affirmed that there had been a decline of passengers’ patronage to the tune of fifty 50 percent adding that if airlines increase airfare due to hike in Jet A1, it would further reduce the rate of passengers’ patronage.

Some operators said that the increase in the price of aviation fuel started in the first week of June, 2016 and that the product that was selling for N115 per litre rose to between N139 and later to N142 per litre, depending on the city the airline is buying the product from.

The operator said that most airlines are disinclined to increasing prices but realistically, without increase in prices inevitably the airlines would be recording huge losses.

“The way out is not increasing prices because if you increase prices you price yourself out of the market. The number of people who travel by air has drastically reduced and most of them cannot afford an increase in fares. Besides, some airlines would want to hold back fare increase to capture the passengers that would shun the high fares in other airlines,” he said.

According to him, “We don’t really know how to manage this. We are yet to take decision in the management but we have to increase price; although we have not yet decided to do so. I will speak to other airlines to know their thinking about this. If we don’t increase price we operate at a loss.

“It is surprising that after they said subsidy has been removed, the product price went up again. One understands that the product is important and I know what is happening to Naira in the exchange market but this is getting too much. Everything is going up- maintenance, training, everything. People should gird their loins, because they should be ready to pay more to travel; not only by air but also by other means,” the official noted.


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