Aiding indigenous airlines to acquire dollars at the Central Bank of Nigeria (CBN) exchange rate for their many transactions as well as reducing the amount of Jet A1 also known as aviation fuel are two key areas that airlines are asking the Federal Government to intervene if the airline industry is to grow further.
The Executive Director, Technical Services, Med-View Airline, Engr. Lookman Animashaun made this known while taking questions from the media during the airline’s inaugural flight to Jeddah, Saudi Arabia explaining that both factors mentioned have had an adverse effect on the airlines.
Animashaun who represented the Managing Director, Alhaji Muneer Bankole at the flag off of the route was emphatic on the way the help for both challenges should come, empathizing that the airline understood the situation government is in but stated that airlines should be treated exclusively too in the sourcing for funds.
According to him, the airline business is riddled with a lot of costs and all of them are dollar based from buying parts to other essential services, he however lamented that despite the skyrocketing of the dollar ticket prices have not increased and airlines are feeling the brunt.
“ One of our major problem in the industry is dollar based, all the spares we procure are done so in dollars and we bring them in a daily basis and we also have to source for dollar to fund these things, it has not been easy.”
“You can imagine the value for the ticket has not increased but the dollar exchange rate has gone astronomically high,” he said.
On what government should do, Animashaun canvassed,” Government should help the industry by allowing them to access funds through the use of the CBN exchange rate for our transaction.”
The Executive Director also said that the amount paid in for aviation fuel is a staggering 45/50% of the indigenous airlines’ operations and that will not help them compete better internationally.
According to him, in Saudi where they just commenced operations Jet A1 is sold for 20 cents for their carriers and 41 cents to non-indigent carriers, this, he said is far lower that the N120 paid for the product in Nigeria despite any fluctuations from the international market.
“The amount of money we are paying for fuel is much. Government needs to come in and see what can be done to reduce the price as 45/50% of our cost of operations go to fuel alone. For example, in Saudi Arabia, their local airlines are paying 20 cents per litre while here we are paying N120 per litre.”
“If you juxtapose that you will see that there are a lot of differences. Government should be able to come out and help indigent carriers to reduce the amount of Jet A1 per litre. As at today, as the market changes, the value of the commodity changes, the price changes along with that pattern but here in Nigeria, it is stagnant.”
He also spoke on the competition on the Jeddah route, saying that Medview is not worried and will emerge a better player there because of what it offers to the market which is new from here.
“Our major competitive attraction is the direct flight to Jeddah, if you compare Medview to Egypt Air or Ethiopian Air or others that are not local here, they have to go through their bases but Medview will take you there direct and time is of the essence. Direct from Here to Jeddah, that is a thing Nigerians will love.”
“Instead of spending 13 hours or 20 hours to Saudi Arabia, under four hours from Kano, you are there and under five and a half hours you are there if you fly in from Lagos and our luggage allowance is also a major factor for us, we offer 32kg, two pieces for Economy and three pieces for First Class.”