Fares may hit N65,000 as domestic airlines demand 25% fuel surcharge

By Chinelo Obogo

Airline Operators of Nigeria (AON) is seeking approval from the Nigerian Civil Aviation Authority (NCAA) to introduce fuel surcharge of between 25 percent and 40percent, which would push cost of  economy flight  tickets to over N65, 000.

At the moment, the minimum cost of flight tickets for economy seats is N50, 000 and an increase in fuel surcharge to between 25 and 40 percent will cause an increase in fare to a minimum of N65, 000 for economy seats. The association had also called for the removal of 5 percent fuel surcharge by the NCAA and review the decision that airlines should obtain approval for an initial three months before implementation of a fuel surcharge.

In a letter to the director general, NCAA, Captain Musa Nuhu, dated July 18, 2022 and signed by its President, Abdumunaf Sarina, the association said the proposal to introduce fuel surcharge is to cushion the effect of the situation. The association is also asking that taxes should be based on the fare due to airlines adding that fuel surcharge should be exempted from Ticket Sales Charge (TSC).

‘’The Airline Operators of Nigeria hereby wishes to seek your kind approval of fuel surcharge as an ameliorative measure to cushion the effect of the continuous increase in the exorbitant price of Jet-A1 on airline operations in the country.

‘’In addition to the crippling effect of intermittent shortages of Jet-A1, the price has risen from N200 per litre in February 2022 to over N780 today. This has greatly increased the operational cost of airlines by well over 130 percent, yet, airlines are unable to increase fares and as well surfer from unavailability of foreign exchange to conduct their operations. ‘’In order to forestall a backlash and total shutdown of the system, airlines are hoping to resort to an introduction of a fuel surcharge of between 25 and 40 percent of Neutral Unit of Consumption (NUC) as a way of offsetting the additional burden brought about by increased fuel cost, bearing in mind that Jet fuel account for about 40 percent of total operational expenses.