Nigerian Airlines Borrow N60bn Amid Fuel Cost Crisis

Airlines in Nigeria have accumulated over N60bn in loans from local banks to finance aviation fuel purchases amid persistently high Jet A1 fuel costs, according to Roland Iyayi, a member of the Board of Trustees of the Airline Operators of Nigeria (AON). Iyayi indicated that some airlines owe more than N60bn to local banks just to procure fuel, highlighting the severe financial strain on the industry.

He attributed this burden to the government's failure to implement recommended measures to address high fuel costs. The AON had previously threatened to shut down operations in February due to escalating fuel prices, prompting intervention from the Minister of Aviation and Aerospace Development, Festus Keyamo.

Despite meetings involving the AON, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), and fuel marketers, no concrete solutions were reached. Iyayi noted that Nigeria's aviation fuel prices are significantly higher than global averages, impacting airlines' ability to meet statutory obligations, including remitting a five percent ticket sales charge to the Nigeria Civil Aviation Authority.