Airline Operator Gives Condition to Slash Airfares in Nigeria

• Nigerians are anticipating lower air ticket costs in line with the expectation of aviation fuel from Dangote Refinery
• In the last few years, airlines have had to increase their costs of tickets due to the high cost of aviation fuel
• Aero Contractors Managing Director Captain Ado Sanusi said that airlines would welcome a price cut in aviation fuel

Legit.ng journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.

Given the impending delivery of aviation fuel or Jet A1 fuel by Dangote Refinery, there are significant indicators that domestic aircraft carriers may lower passenger ticket rates.

Over the previous four years, domestic airlines were compelled to improve operations by increasing ticket rates due to the consistent rise in jet fuel prices.

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On February 20, 2022, the twelve scheduled airlines—Air Peace, Aero Contractors, Arik Air, Max Air, Azman, Dana Air, Ibom Air, Green Africa, Overland, Rano Air, ValueJet, and United Nigeria Airlines—jointly decided to raise fares by 100% to cover operating expenses.

However, Vanguard has learned that operators are now looking forward to a potential Jet A1 price collapse, which might result in cheaper travel tickets.

What operator said

While the cost of Jet A1 has remained the same, Aero Contractors Managing Director Captain Ado Sanusi said that airlines would welcome a price cut.

Sanusi said:

“As operators, we have no idea of the refinery where marketers buy Jet A1, but what we look at is the price. If the price drops, whether it is from Dangote Refinery or refineries outside the country, we will appreciate it.

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”The price has been steady and that is what we use in making our projections. The cost of jet fuel has been between an average price of N1,200 and N1,400 per litre."

Regarding the possibility of a price decline due to the impending supply, he stated that it would depend on the price at which the Dangote Refinery sells Jet A1.

Sanusi asserts that there will be lower ticket prices if Dangote sells for less than the market rate.

Nonetheless, he said there won't be a price decrease if the refinery isn't selling for less than the going rate.

Additionally, he stated that this depends on the type of crude oil Dangote purchases and the price of refining it.

He said:

“What we think will bring down the price of Jet A1 is the freight cost. If Port Harcourt, Warri and Dangote refineries could give us enough jet A1 for some time and we have steady prices, it will definitely have an impact on price. However, that won’t be possible in a few days. It has to be consistent for a few weeks and even months.”

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Marketers speak on new fuel price as another refinery prepares to release product after Dangote

Airlines slash domestic airfares

The cost of domestic flights in Nigeria has drastically decreased, giving customers various options despite the rising Jet A1 fuel prices.

Legit.ng reported that this comes after a sharp decline in passenger volume in the first quarter of 2024.

In February, major domestic carriers, including Air Peace, Dana Air, and Ibom Air, offered economy travel tickets for N140,000 for most locations. This was a significant increase from the average of N89,000.

Source: Legit.ng