In a staggering blow to Nigerian aviation, the cost of the very lifeblood of the industry has tripled recently. What was once a manageable ₦900 per litre has mutated into a ₦3,500 burden, leaving operators with a grim choice: stop flying or face financial ruin.

As the ripples of the US-Iran crisis reach Nigerian runways, the nation’s airspace hangs in a delicate balance.

Now, there are strong indications that domestic airlines in Nigeria may halt operations from Thursday, April 30, 2026, over what operators described as unbearable and unsustainable aviation fuel prices, raising fresh fears of widespread travel disruption across the country.

Industry insiders say the airlines, having engaged both the Federal Government and oil marketers without a breakthrough, may be left with no option but to ground flights by Thursday.

The looming shutdown comes after several complaints by operators, who have watched the price of Jet A1 surge by over 300 per cent compared to February levels, pushing operating costs to the brink.

Passengers, many of whom rely on domestic flights for business and urgent travel, now face uncertainty.

In a bid to avert the crisis, Festus Keyamo, the minister of Aviation and Aerospace Development, convened a meeting with airline operators and fuel marketers in Abuja last week. However, findings indicate that the tripartite talks ended in a deadlock, with operators unwilling to shift their stance unless decisive action is taken.

At the end of the two-day meeting, the minister announced a 30 per cent reduction in aviation-related taxes as part of efforts to ease the burden on airlines. While the gesture was acknowledged, operators insist it falls short of addressing the root problem.

Speaking on the first day of the meeting, Allen Onyema, vice president of the Airline Operators of Nigeria, welcomed the government’s intervention but maintained that fuel marketers must account for the sharp rise in prices.

Onyema said,

“This government has helped the industry more than anyone since 1999, and the President is even willing to waive 30 per cent of the debts airlines are owing.

“But the truth is that the marketers must be brought to book to explain how they came about the 300 per cent increase when even Dangote is surprised because what he is selling to us is still the cheapest.”

At the end of the second day, Onyema issued a stark warning, giving a seven-day ultimatum from midnight last Thursday for action to be taken. “Since the advent of the US-Iran war, there has been a spike in aviation fuel in Nigeria, which we, the Airline Operators of Nigeria, feel is not proportionate to the hike internationally.

“We expect that in the next 48 hours something drastic should be done because no airline will fly in this country in the next seven days if nothing is done, not because they don’t want to fly, but because fuel may not be available to us at sustainable pricing.”

Providing further insight into the financial strain, Onyema disclosed that fuel prices have skyrocketed from about ₦900 per litre before the crisis to between ₦2,700 and ₦2,900, with some marketers selling as high as ₦3,500.

“Before the crisis, we were buying fuel at about N900 per litre. Now it has risen to between ₦2,700 and ₦2,900, with some selling as high as ₦3,300 to ₦3,500,” he said.

According to him, airlines are now operating primarily to service fuel costs. “All the airlines in Nigeria have been flying to pay fuel marketers only, and you don’t want to compromise safety,” he added.

Despite speculations about indebtedness, senior airline officials who spoke to our correspondent in confidence on Sunday, due to the sensitive nature of the matter, insisted that operators are up to date with payments to key aviation agencies, including the Federal Airports Authority of Nigeria and the Nigerian Airspace Management Agency.

According to Punch report, the Airline Operators of Nigeria have formally requested additional relief measures from the government.

In the letter dated April 21 and signed by Abdulmunaf Sarina, AON president the group called for the immediate suspension of aviation taxes, fees, and charges for at least six months.

The operators argued that the unprecedented rise in fuel costs threatens not only airline operations but also jobs and the stability of the aviation sector.

Among other demands, the AON proposed the introduction of a non-taxable fuel surcharge, a standard practice in international aviation to help airlines manage rising costs.

They also urged the government to direct oil marketers to issue credit notes to airlines affected by what they described as excessive and arbitrary price hikes. In addition, the group called for the establishment of an industry tax reform committee to review existing charges, assess their relevance, and align them with global standards.

As the deadline approaches, uncertainty hangs over Nigeria’s aviation sector. Another airline executive, who spoke anonymously on Sunday because he was not authorised to comment publicly, warned that the shutdown threat remains real. “If nothing is done, no airline will be flying by Thursday,” he said.

A Financial Times report revealed that both companies are exploring alternative ways to handle the risks associated with how their AI models were trained. Copyright owners, including authors, publishers, and media houses, have filed more than a dozen lawsuits against tech companies including OpenAI, Microsoft, Meta, and Anthropic, accusing them of using protected works without authorisation to train their large language models.

To manage these legal threats, OpenAI has reportedly partnered with Aon, one of the world’s leading insurance firms, to secure coverage worth up to $300 million for emerging AI-related risks. However, some sources told the Financial Times that the actual figure could be lower, and regardless, it still falls far short of what would be required to cover the potential damages from ongoing lawsuits.

Kevin Kalinich, Aon’s Global Cyber Risk Head, explained that the insurance industry itself is finding it difficult to match the scale of risk caused by AI model providers. “The insurance sector broadly lacks enough capacity for (model) providers,” he said.

Because of this gap, OpenAI is reportedly considering “self-insurance”, essentially setting aside investor capital in a protected pool to absorb possible legal costs. Discussions have also surfaced about creating a “captive,” an internal insurance structure used by large firms to manage risks that the traditional market cannot handle.

Anthropic appears to be taking a similar route. According to the Financial Times, the company is using part of its own funds to cover a $1.5 billion settlement that was preliminarily approved by a California federal judge last month. 

The case was filed by a group of authors who alleged that their works were used to train Anthropic’s AI system, Claude, without consent.

The number of copyright claims is forcing AI companies—and their backers—to confront questions about financial accountability and transparency. If investor funds are being used to offset legal risks, governance issues inevitably follow: who decides how much to reserve for potential liabilities, and how are investors’ interests safeguarded?

Analysts believe these developments could change how AI startups raise and allocate capital. Investors may soon demand clearer disclosures on data sources, litigation exposure, and risk management frameworks before funding new ventures.

Meanwhile, the U.S. Copyright Office is still assessing whether training AI systems on copyrighted content amounts to infringement, while the European Union’s AI Act could compel firms to reveal their training datasets, opening another front of legal vulnerability for AI developers.

Neither OpenAI, Anthropic, nor Aon has commented on the report.

Speaking at a recent meeting organized by the Aviation Round Table (ART) in Lagos, Onyema highlighted the limitations faced by Nigerian airlines due to the lack of necessary infrastructure.

In his address, Onyema explained that airports with transit facilities play a vital role in passenger movement, acting as hubs where travelers can be efficiently brought together and seamlessly transported to their final destinations.

Regrettably, Nigeria currently lacks such facilities at its airports, impeding the growth and success of domestic carriers.

“To support Nigerian airlines and bolster their strength, we must improve airport infrastructure. Government officials often compare Nigerian airlines to successful carriers like Ethiopian Airlines, claiming that Nigerian carriers are not flying internationally.

However, without the necessary infrastructure, it is unfair to blame the airlines,” Onyema stated.

Onyema further highlighted the lack of major Maintenance, Repair, and Overhaul (MRO) facilities in Nigeria, leading to Nigerian carriers incurring substantial costs by maintaining their aircraft overseas.

He noted that these expenses, including the transportation of aircraft abroad, significantly burden the airlines.

Onyema stressed that the establishment of MRO facilities should have been a priority for the government, suggesting that rather than engaging in direct business ventures, the government should provide an enabling environment for private entities to develop the necessary facilities.

Meanwhile, the Airline Operators of Nigeria (AON) has announced a partnership with the management of the Nigeria Customs Service to establish an Aviation Desk within the federal agency.

The primary objective of this collaboration is to provide specialized aviation training for Customs personnel, enabling them to better understand the sector.

Additionally, the partnership aims to expedite the clearance of aircraft and spare parts, emphasizing the urgency in situations like when an aircraft is grounded (AOG).

Onyema explained that many Customs officials currently lack a comprehensive understanding of aviation operations, resulting in delays in clearing aircraft spare parts.

He highlighted the significance of promptly clearing such items to ensure the seamless functioning of aircraft, emphasizing that in other countries, spare parts under AOG are immediately cleared.

Onyema called for an improvement in the ease of doing business, not only within Customs but throughout the aviation sector, to provide stronger support for Nigerian airlines.

The challenges faced by domestic airlines in Nigeria continue to persist, prompting stakeholders to advocate for enhanced infrastructure and streamlined processes.

Addressing these issues is essential to foster the growth and success of the country’s airlines, ensuring improved connectivity and operational efficiency.

AON, Friday, announced the shutdown of operations, with effect from Monday May 09, 2022, over the skyrocketing cost of Aviation fuel, which has reached an all-time high of N700 per litre.

Aero Contractors had issued this statement on Saturday in solidarity to AON.

But in the airlines backtracked on Sunday. Arik Air and Aero Contractors issued notification to the traveling public, agreeing they will be operating all their scheduled flights on Monday, May 9, 2022.

“Both managements fully identify with and endorse the efforts of the Airline Operators of Nigeria ( AON ) to bring about a conducive operating environment for Nigerian carriers as the current price of JET A1 is unsustainable and could result in the untimely demise of most airlines.

“However, we have assurances that the government is looking at the issues raised by the AON and will come up with a decision that will be in the best interest of the industry and the traveling public.

“Passengers who are booked to travel on both Arik Air and Aero Contractors tomorrow and beyond should proceed to their airports of departure to board”, the statement reads.

Recall that Ibom Airlines Limited (Ibom Air) had issued similar statement on Saturday, announcing that they will not participate in the proposed strike.

Ibom Air, a public statement said, the airlines acknowledges the existential threat that the runaway fuel price increases pose for the air transport industry in Nigeria, however “every airline has its unique business model and pressures”.

Ibom Air, a public statement issued on Saturday, said, the airlines acknowledges the existential threat that the runaway fuel price increases pose for the air transport industry in Nigeria, however “every airline has its unique business model and pressures”.

The airline said it has been inundated with inquiries about what will happen on Monday 09 May, 2022, following the public statement issued by the Airline Operators of Nigeria (AON) Executive, on Friday 06 May, 2022 and it became necessary to make the following clarifications:

“Ibom Air acknowledges the existential threat that these runaway fuel price increases pose for the air transport industry in Nigeria. We agree that this out-of-control situation is simply unsustainable. However, every airline has its unique business model and pressures. We believe that in spite of the escalating fuel prices, airlines volunteering to stop operations would rather exacerbate an already bad situation.

“Ibom Air has financial obligations to suppliers, financiers and staff, which depend on uninterrupted flow of revenue to service. More importantly is the fact that having been paid by customers in advance for flight bookings we are bound by contract to deliver the services already paid for, to avoid exposing the airline to the risk of avoidable litigation.

“Apart from the above factors, Ibom Air is currently the only airline serving Akwa Ibom State directly and as such, any voluntary stoppage of operations would completely cut off access by air into and out of the State. Such action would be directly in conflict with and detrimental to the interest of our shareholder.

“In view of the foregoing facts, Ibom Air had respectfully disagreed with the decision of AON to suspend flight operations on Monday 09 May, 2022. Ibom Air cannot in the circumstance volunteer to stop operating and will continue normal operations on Monday 09 May, 2022 and beyond. Ibom Air’s inclusion as “signatory” to the statement released by AON must have derived from its active and committed membership of the AON. 

“The above notwithstanding, we identify very strongly with our AON colleagues and will participate in every effort to resolve this frightening situation as soon as possible in the interest of our business, our customers, our stakeholders and our country.

“We thank our customers for their continued patronage and we thank the AON for our collective efforts to secure a sustainable fuel pricing regime for the airlines”, the statement reads:

Background:

The Airline Op​​erators of Nigeria (AON), Friday, announced the shutdown of operations, with effect from Monday May 09, 2022, over the skyrocketing cost of Aviation fuel, which has reached an all-time high of N700 per litre.

The operators sympathised with the passengers, saying Jet A1 has shot up the cost of operations to over 95 percent.

The Operators stated this in a letter its President, Alhaji Abdulmunaf Yunusa Sarina, sent to the Minister of Aviation, Senator Hadi Sirika.

Sarina’s position was endorsed by the chief executives of all the domestic airlines.

The letter read: “It is with a great sense of responsibility and patriotism that the Airline Operators of Nigeria (AON) have carried on deploying and subsidizing their services to our highly esteemed Nigerian flying public in the last four months despite the steady and astronomical hike in the price of JetA1 and other operating costs.

“Overtime, aviation fuel price (JetA1) has risen from N190 per litre to N700 currently. No airline in the world can absorb this kind of sudden shock from such an astronomical rise over a short period.

“While aviation fuel worldwide is said to cost about 40% of an airline’s operating cost globally, the present hike has shut up Nigeria’s operating cost to about 95%.

“In the face of this, airlines have engaged the Federal Government, the National Assembly, NNPC and Oil Marketers with the view to bringing the cost of JetA1 down which has currently made the unit cost per seat for a one hour flight in Nigeria today to an average of N120,000.

“The latter cannot be fully passed to passengers who are already experiencing a lot of difficulties.

“While AON appreciates the efforts of the current government under the leadership of President Muhammadu Buhari to ensure air transport in Nigeria grows, unfortunately, the cost of aviation fuel has continued to rise unabated thereby creating huge pressure on the sustainability of operations and financial viability of the airlines. This is unsustainable and the airlines can no longer absorb the pressure.

“To this end therefore, the Airline Operators of Nigeria (AON) hereby wishes to regrettably inform the general public that member airlines will discontinue operations nationwide with effect from Monday May 9, 2022 until further notice.

“AON uses this medium to humbly state that we regret any inconveniences this very difficult decision might cause and appeal to travelers to kindly reconsider their travel itinerary and make alternative arrangements.”

This report by ThisDay Newspapers warned that barring any urgent intervention, Aero Contractors may be on its way out of the skies after over 61 years of flight operations.

According to the report, with only two aged aircraft, Bombardier Dash 8-300 and Boeing 737-500 in their early 30s and totally bereft of operating cash, the airline is now on its knees about to shut the door for scheduled services.

“Aero Contractors, which provided shuttle service for oil and gas industry for decades and extended its service to scheduled flight operations since 2000 has become moribund with over N50 billion debt overhang”.

But in a swift response, the airlines said the news story published today, May 6, 2022 captioned: “61 years after Nigeria’s Foremost Airline, Aero Contractors Goes Under, was “highly speculative, preposterous and misleading of what was not discussed”.

Aero Contractors, however, acknowledged that airlines in the country are faced with multiple challenges.

“The discussion focused on the challenges facing all airlines in industry, which is common and has been addressed on numerous occasions by the Association of Nigerian Airlines (AON).

“These include high cost of aviation fuel, high foreign exchange rate, high maintenance cost, inflation and low purchasing power of the traveling public following the increase of fares.

“Like many airlines in Nigeria, Aero Contractors have been operating daily, and facing the challenges squarely.

“We categorically deny any plan to close operations as the airline is proactively taking necessary measures and strategy to continue operation and ensure a great travel experience to our highly esteemed customers.

“Aero Contractors has one of the best Maintenance Repair Overhaul (MROs) in West and Central Africa and is Nigeria’s oldest aviation company with capacity to offer both scheduled airline services and maintenance for third party, licensed in over three countries.

“We urge our clients, customers, the traveling public and our stakeholders to disregard the story by Thisday”, the story reads.