….calls for a meeting with the DG
The Airline Operators of Nigeria is seeking palliatives from the Nigerian Civil Authority, NCAA to cushion the effects of the continuous increase in the exorbitant price of Jet A1 on airline operations in the country.
This is just as the body is seeking an audience with the Director General NCAA to address this all important issue.
In a letter to Captain Musa Nuhu dated July 18, 2022, the AON President, Alhaji Abdulmunaf Yunusa listed the areas the NCAA can assist in saving their business.
These includes approval of Fuel Surcharge as an ameliorative measure to cushion the effect and review of decisions.
According to him, “In addition to the crippling effect of intermittent shortages of Jet A-1, the price has risen from N200 per litre in February 2022 to over N780 today. This has greatly increased the operational cost of airlines by well over 130%, yet airlines are unable to increase fares and as well suffer from unavailability of foreign exchange to conduct their operations”.
In order to forestall a backlash and total shutdown of the system, airlines say, they hope to resort to an introduction of a Fuel Surcharge of between 25% – 40% of NUC as a way of offsetting the additional burden brought about by increased fuel cost bearing in mind that jet fuel accounts for about 40% of total operational expenses.
The AON also called on the NCAA to review certain decisions it had taken which includes; the decision that airlines are required to obtain approval for an initial three (3) months before implementation of a fuel surcharge and waiver of the demand that airlines pay an additional 5% on the Fuel Surcharge entirely separate from the 5% Ticket Sales Charge (TSC).
They emphasised that, unless this is done, it will mean in effect that whatever is collected by the airlines as Fuel Surcharge to cushion the effect of the high fuel price will be taken away once again by NCAA.
“This in effect will amount to double jeopardy as airlines will be unable to offset the additional cost which the Fuel Surcharge is meant to address in the first place”.
In addition to the plea and request, the AON, proposes that taxes should be based on the portion of the fare due to airlines less the Fuel Surcharge which is specifically for the purpose of cushioning the effect of rising fuel price and not on the total paid for the ticket inclusive of the Fuel Surcharge (i.e. Fuel Surcharge should be exempted from TSC).
“We therefore request that you would favourably consider and kindly effect our proposal to help alleviate the sufferings of airlines in the country given the current scarcity and consistently rising cost of JetA1. This is standard practice all over the world; notably Britain, America and Singapore among others”.
