Domestic airlines are facing mounting pressure following a sharp spike in the price of aviation fuel, with strong indications that passengers may soon pay significantly higher airfares as operators struggle to absorb rising costs.
Checks across the industry show that the cost of Jet A1, the critical fuel used by aircraft, has surged by more than 100 per cent in recent weeks, largely driven by disruptions in global crude oil supply linked to the ongoing crisis in the Middle East. The situation has worsened operating conditions for Nigerian carriers, many of whom are already grappling with high costs and thin margins.
Before the escalation of tensions in the region, aviation fuel sold for between N900 and N995 per litre. However, prices have now climbed to between N2,500 and N2,700, depending on the location of purchase, significantly increasing the financial burden on airlines.
Industry sources say the volatility of the product has further complicated operations, noting that prices have fluctuated multiple times since late February, when the conflict intensified. This instability has made it difficult for operators to plan effectively or maintain consistent pricing structures.
Aviation fuel remains the single largest component of airline operating expenses, historically accounting for about 30 to 35 per cent of total costs. However, analysts say that figure has now risen sharply, with fuel expenses consuming as much as 45 per cent of overall operational outlay under current market conditions.
Despite the surge, many domestic airlines have continued to maintain ticket prices at around N195,000 on key routes, a situation industry stakeholders describe as unsustainable. Operators warn that if the current trend persists, fares could double in the coming weeks as airlines adjust to reflect actual operating costs.
The spokesperson for United Nigeria Airlines, Chibuike Uloka, called on the Federal Competition and Consumer Protection Commission to engage more closely with airline operators to understand the realities of the industry.
His remarks come amid allegations by the commission that some airlines may be involved in price fixing, claims that have been strongly denied by operators.
Uloka argued that rather than focusing on accusations, regulators should examine how airlines have managed to sustain current fare levels despite the steep increase in fuel prices. He warned that the situation could deteriorate further if Jet A1 rises to N3,000 per litre, a development that could force some operators out of the market entirely.
Industry observers note that any reduction in the number of active airlines would likely shrink available seat capacity, thereby pushing ticket prices even higher and limiting travel options for passengers.
The pressure on airlines is also being compounded by rising global crude oil prices, which have jumped from about $65-$69 per barrel to approximately $112 per barrel. This increase has had a direct impact on the cost of refined petroleum products, including aviation fuel.
Compounding the challenge is Nigeria’s limited domestic crude supply, which has reportedly forced the Dangote Petroleum Refinery to rely partly on imported crude, adding further cost pressures across the supply chain.
Aviation expert Samuel Caulcrick said the shift in cost dynamics within the industry has been dramatic, with fuel overtaking maintenance as the most significant expense for airlines.
He projected that airfares could rise by between 20 and 25 per cent in the near term, as operators attempt to stay afloat in the face of escalating costs.
According to him, the persistent increase in Jet A1 prices has fundamentally altered the economics of airline operations, leaving carriers with little room to manoeuvre.
With fuel prices continuing to trend upward and global uncertainties unresolved, industry stakeholders warn that fare hikes may be inevitable, signalling tougher times ahead for both airlines and air travellers.
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