Airlines face pressure as jet fuel price doubles

Domestic airlines are bracing for a potential hike in ticket prices as the cost of aviation fuel, commonly known as Jet A1, has surged by nearly 100 per cent, significantly increasing operational expenses across the sector.

Findings indicate that the spike, driven largely by the ongoing crisis in the Middle East, has disrupted crude oil production and supply chains, pushing up the cost of fuel and placing airlines under intense financial strain.

Jet A1, which previously sold between ₦900 and ₦995 per litre before the crisis, now costs between ₦2,500 and ₦2,700 depending on the location, marking a sharp escalation in operating costs for carriers.

Industry operators say aviation fuel, which traditionally accounts for about 30 to 35 per cent of airline expenses, has now risen to nearly 45 per cent, making it the single largest cost component and forcing airlines to reconsider their pricing models.

Sources within the industry revealed that fuel prices have remained highly volatile since late February, with multiple price adjustments complicating planning and scheduling for airlines.

The spokesperson for United Nigeria Airlines, Chibuike Uloka, called on the Federal Competition and Consumer Protection Commission to engage operators on the sustainability of current fares amid rising costs.

The FCCPC had recently accused some airlines of price fixing, a claim rejected by operators, who insist that current ticket prices do not reflect the true cost of operations.

Uloka noted that despite fuel prices exceeding ₦2,000 per litre, many airlines have continued to maintain fares around ₦195,000, a situation he described as unsustainable if the current trend persists.

He warned that if prices climb to ₦3,000 per litre, some airlines may be forced to suspend operations, potentially reducing capacity and driving fares even higher.

Further compounding the situation is the rise in global crude oil prices, which have climbed from about $65–$69 per barrel to roughly $112, intensifying the pressure on fuel costs and, by extension, airline operations.

Experts say Nigeria’s limited crude oil supply for domestic refining has worsened the situation, forcing reliance on imports and exposing the sector to global price shocks.

Aviation analyst Samuel Caulcrick projected that airfares could rise by 20 to 25 per cent in the coming weeks, as airlines struggle to absorb the increasing burden of fuel costs.

He explained that the shift marks a significant change in cost dynamics within the industry, where maintenance used to dominate expenses, but has now been overtaken by fuel costs.

With operators warning that they can no longer sustain current pricing levels, passengers may soon face higher ticket fares as airlines adjust to the new economic reality.