The Airline Operators of Nigeria has explained that foreign exchange and aviation fuel shortages in the country were responsible for the recent hike in airfares.
The spokesperson of AON, Prof Obiora Okonkwo, disclosed this to our correspondent in Abuja on Sunday.
According to him, although aviation fuel also known as JetA1 is sold below N700/litre, it is currently scarce.
He explained that the airlines had to source forex from the parallel market, as they could not access dollars at the official market due to a shortage.
He claimed that despite the recent airfare hike, airline operators were still subsidising fares to a very large extent.
Okonkwo, who is also the chairman of United Airlines, noted that the aviation sector was highly dependent on foreign components and that its operating costs were largely affected by forex market volatility.
He further stated that it put pressure on air operators’ operation funds, as they would require more money to buy forex.
“The foreign exchange and aviation fuel costs were responsible for over 99 per cent of aviation components,” he averred.
He urged the government to come up with measures that would mitigate the situation by giving operators access to funds.
He said, “The actual or reasonable cost should be higher in the actual sense. There is no doubt that it will put pressure on the operation funds because it will require more money in exchange and everything in aviation is 99 per cent and a half per cent foreign components. So, we are hoping that the government would find a good reason to come up with some measures that would mitigate that by creating access to capital for the operators.”
Speaking on the unification of the exchange rate and how it affects airlines, Okonkwo states that the AON does not dictate for the government in its policymaking.
According to him, AON is not a labour union, as forex scarcity affects everyone and not just the aviation sector.
He stated that they were hoping the government would find a good reason to come up with some measures that would mitigate the situation as it had become unbearable for everyone.
“We don’t dictate to the government. It is the policy of the government,” he noted.