The Lagos Chamber of Commerce and Industry, LCCI, has warned of complete disruption of movement of goods and services following imminent and obvious collapse of the aviation industry.
The Chamber has expressed deep concern about the aviation crisis because of the systemic importance of air travel for the conduct of trade and commerce across borders.
It therefore urged the Government to take immediate steps toward resolving the crises in the aviation sector as air transportation is considered one of the safest channels considering the despicable level of insecurity in the country, adding, “Hence, resolving the continued fuel crisis facing the safest transport channel is critical for the business community.”
The LCCI, noted that while the Government tackles terrorists, bandits, and kidnappers who have taken over major highways in the country, the Government must immediately consider involving the Central Bank of Nigeria, CBN and the Nigerian National Petroleum Company, Limited, NNPC in making foreign exchange available for aviation fuel imports.
Though it said that the more sustainable solution would be refining Jet-A1 fuel for local consumption as it acknowledged that the current energy crisis is real and global, it is aggravating in Nigeria because we do not produce the oil.
The aviation sector qualifies for targeted financing to facilitate economic activities in the country, boost economic growth and avert an imminent recession, it said.
The LCCI, observed that the crisis in Nigeria’s aviation industry has reached a problematic level as domestic airlines are faced with an astronomical hike in the price of aviation fuel, with the commodity rising from N300 per litre to over N800 per litre within five months.
The challenging operating environment has also led to an unprecedented increase in airfares and continuous delays and flight cancellations by domestic airlines.
Though it aligned with the Federal Government belief that there are no immediate solutions to the crisis currently rocking Nigeria’s aviation sector, as the issues are global, it said NNPC and CBN intervention would make a difference.
Recently, the umbrella body for domestic airlines in the country, Airline Operators of Nigeria (AON), notified air transport passengers that the sector was experiencing a significant crisis.
This crisis was (and still is) an acute scarcity of aviation fuel (Jet A1), which has caused intermittent flight delays and cancellations. Some airlines have been forced to shut down operations due to the harsh operating environment. With the rising insecurity that has bedevilled our road transport system, a safer option is air transportation.
This portends challenges around the movement of goods and business conduct across locations, said the Chamber, stressing that thenGovernment cannot afford to allow this sector to suffer from these crises.
Operators in the industry are faced with a double whammy issue of foreign exchange scarcity and the high cost of aviation fuel, Jet-A1, which is a significant cost component in airline operations.
“We have noted that from the beginning of the year, aviation fuel scarcity has remained a persistent and unresolved problem that has impacted the cost-of-service delivery, as reflected in the rising cost of flights. Aviation fuel prices have risen from an average of N400/litre as of February to about N800/litre in recent times. With the business community not sure of any intervention to provide respite, the woes of the airline operators may be far from over.
“The earlier intervention by the National Assembly alongside the Central Bank of Nigeria (CBN) that saw the Nigerian National Petroleum Company Limited (NNPC) supply Jet-A1 at a discounted price of N480/litre may not have achieved the desired results. The sector has continued to suffer from persistent shocks and disruptions to operations.” LCCI noted.