This was made known in a statement on Friday by Obiora Okonkwo, the spokesman of local airlines, who called for immediate government intervention to prevent the collapse of local airlines.

The airlines said that the volatility in foreign exchange rates and the soaring cost of aviation fuel at N1,300 per litre had disrupted operational planning and stability within the aviation sector.

The Central Bank of Nigeria on June 14, 2023, unified the different segments of the forex market, causing the naira to depreciate significantly at both the official and the autonomous markets.

The local currency weakened to over 1,500/$ at the parallel on Wednesday and exchanged 1474.62/$ at the official market on Thursday.

The country has been struggling with lingering dollar scarcity due to reduced oil production, which brings in over 90 per cent of the country’s dollars.

This has made it difficult for local carriers to raise enough foreign exchange to run checks and conduct comprehensive maintenance of their fleets overseas.

Okonkwo, who also chairs United Nigeria Airlines, explained that the unforeseen increase in aviation fuel prices from N700 per litre and the rise in the exchange rate to 1,400/$ had resulted in significant losses for airlines.

Passengers who purchased tickets well in advance under previous rates were being airlifted at the current higher costs, further impacting the airlines’ loss in the revenue stream, he explained.

“We are making losses on factors that are beyond our control. We are not only faced with the problem of scarcity of dollars; even the aviation ecosystem is feeling the heat. Handling companies have increased the cost of their services, airports have increased their charges and those that service the aircraft have also increased the cost of their services. The monies for these payments are coming from the passengers who are already exhausted financially,” he said.

Okonkwo noted that numerous businesses in Nigeria were experiencing low returns, leading to a decline in the number of essential passengers travelling during both peak and off-peak seasons.

He stated that as a result, the airlines were struggling to maintain adequate load factors to support their operations during the current low season, as there were fewer traveler for tourism and social engagements.

“Passenger traffic has shrunk because even those on social engagement like weddings, burials, and other ceremonies may not be inclined to spend money on flight tickets; they would rather send credit alerts to those hosting the events who would appreciate such gestures. So, they pay instead of appearing in person.

“Air travel is a catalyst to economic development. There should have been government engagement with airlines at different levels. Airlines do not have special forex allocation; so, they buy at the same place traders who trade in Brazilian hair, textiles and others buy.

“Our passion to remain in this business is being eroded. We are at the point of oxygen supply. Some airlines are going into a coma. Our equipment is diminishing. The minimal revenues we earn to keep the airlines flying, we convert to pay our lessors,” he noted.

TechEconomy obtained a study titled “Nigeria’s Aviation Industry Customer Satisfactory Survey Report 2022” that stated that in the first half of 2022, the price of jet fuel increased by 70 percent.

According to the study, the statistics showed the biggest increase in jet fuel since 2022.

Additionally, it stated that the higher cost of jet fuel was a big issue for airlines during the first half of 2022.

“Fuel is the industry’s largest cost item with $192bn in 2022. The ongoing war in Ukraine, which keeps prices for Brent Oil high, continues exacerbating the situation. The increased jet fuel price now represents a significant challenge for airlines in the first six months of 2022.

Jet fuel prices rose more than 70 percent, indicating one of the steepest jumps in jet fuel prices since 2022. The rise in jet fuel is driven by the soaring crude oil price following Russia’s invasion of Ukraine in February 2022, when the Brent crude oil price rose by 11 percent.”

The report said that Airbus was facing challenges in improving its production rate of the A320 family to 65 percent in mid-2023.

It added that Boeing had a massive overhang of already-built parts in inventory.

“Particularly with the 787, there remains a lack of certainty around production. However, supply chain bottlenecks cascade throughout the aerospace industry, hitting companies such as single-engine light aircraft manufacturers such as Cirrus-Aircraft.”

In the report, PCL lamented high marker exit by both domestic and foreign operators.

“It’s traceable to mismanagement of funds, poor safety compliance, limited infrastructure, and stifling regulatory policies.”