LAGOS, Nigeria — Allen Onyema, founder and chief executive officer of Air Peace, has revealed that Nigerian airlines are now borrowing billions of naira to purchase aviation fuel as the cost of the commodity continues to surge, posing significant challenges to the sustainability of the aviation sector.
In an interview on Arise TV on Tuesday, Onyema said the price of aviation fuel, also known as Jet A1, has increased by more than 250 percent from approximately N900 per litre to as high as N3,300. He described the situation as alarming and warned that without urgent intervention, many airlines may be forced to shut down operations.
Onyema explained that airlines are unable to pass the full cost of the fuel hike onto passengers due to the economic realities facing Nigerians, leaving carriers to absorb the steep increases. This, he said, has forced many airlines to resort to borrowing to keep their operations running, further compounding their financial challenges.
The Air Peace CEO also highlighted the broader operating difficulties in the aviation sector, including the high cost of aircraft maintenance, foreign exchange volatility, and the inability to repatriate funds from foreign countries. He called on the federal government to urgently intervene to save the industry from collapse.
He also noted that the Central Bank of Nigeria is making foreign exchange available to the aviation sector at the official rate, but that the allocation is insufficient to meet the industry’s needs. Onyema appealed to the government to ensure that airlines have consistent access to forex at the official rate to enable them to purchase spare parts, pay for maintenance, and meet other operational costs.
The airline chief also stressed the need for the government to urgently address the rising cost of aviation fuel, describing it as a threat to the survival of local airlines and the country’s aviation industry. He warned that if the situation continues unchecked, Nigeria risks losing its domestic airlines and the jobs and economic benefits they provide.
In response to the challenges, Onyema called for a comprehensive review of the aviation sector’s operating environment, including taxation, regulatory fees, and other levies that add to the cost of operations. He expressed hope that the government would act swiftly to prevent the collapse of the industry.
As the aviation sector continues to grapple with these challenges, the Air Peace CEO’s remarks serve as a stark reminder of the fragility of Nigeria’s aviation industry. For now, airlines are struggling to stay afloat, and the future of the sector hangs in the balance.
