AIRLINES BORROW OVER ₦60BN TO FUND FUEL AS COSTS RISE

Nigerian airlines have accumulated more than ₦60 billion in loans from local banks to finance aviation fuel purchases as rising Jet A1 prices continue to put pressure on their finances.

A member of the Board of Trustees of the Airline Operators of Nigeria, Roland Iyayi, disclosed that some airlines were heavily indebted to banks because of the cost of keeping their aircraft fuelled and operational.

He said the rising fuel burden had pushed airlines into borrowing while limiting their ability to operate profitably.

According to Iyayi, industry stakeholders had previously met with the Nigerian Midstream and Downstream Petroleum Regulatory Authority, fuel marketers, and the AON to discuss measures to reduce aviation fuel costs. However, he said recommendations from the discussions had yet to produce significant government intervention.

He added that aviation fuel prices in Nigeria remained substantially higher than in many other markets, creating additional pressure on local carriers.

The fuel crisis has also affected airlines’ ability to meet some statutory obligations, including the five per cent ticket sales charge payable to the Nigeria Civil Aviation Authority.

Iyayi said airlines had struggled to raise ticket fares sufficiently to offset the increase in fuel expenses, forcing some operators to continue flying despite making losses.

The development highlights the growing financial pressure on Nigeria’s aviation industry, where operators are also dealing with aircraft maintenance costs, foreign exchange challenges, and other operational expenses.