Domestic Airlines Still Pay N1,600/L for Jet‑A1 Despite Hormuz Reopening—Operator

Nigerian domestic airlines are yet to experience any significant relief in operating costs despite the reopening of the strategic Strait of Hormuz and the subsequent decline in global crude oil prices, as aviation fuel prices in the country remain above N1,600 per litre.

The chief commercial officer (CCO) of United Nigeria Airlines, Adedayo Olawuyi, disclosed this on Thursday during an interactive session with members of the League of Airport and Aviation Correspondents (LAAC) in Lagos.

According to Olawuyi, although Brent crude prices have moderated to about $72.50 per barrel following the resumption of commercial tanker traffic through the Persian Gulf after a memorandum of understanding (MoU) between the United States and Iran, the local market has yet to reflect the global trend.

He noted that Jet-A1, which remains the single largest cost component for airlines, is still selling for between N1,600 and N1,700 per litre, thereby sustaining pressure on domestic carriers.

Olawuyi said the disconnect between global oil prices and local aviation fuel costs has forced airlines to continue relying on sophisticated revenue management strategies to remain afloat.

“The truth is, it is not sustainable for us,” he said. He continued, “Even when we paid as much as N3,300 per litre for fuel, ticket prices did not increase by 300 per cent or even 100 per cent.

“We are still selling tickets for around N120,000. Prices went up, but they have been moderated by demand and sales dynamics. Everyone is trying to use advanced revenue management principles to maximise yield, but market forces are aggressively at play.”

He explained that despite industry-wide constraints in seat capacity, United Nigeria Airlines has continued to expand its operations and add capacity to the market.

The airline executive, however, lamented the growing operational and financial burden posed by bird strikes, describing the phenomenon as a major threat to airline operations.

According to him, United Nigeria Airlines, which currently operates a fleet of nine aircraft and transports between 120,000 and 130,000 passengers monthly, recently suffered a series of bird strike incidents that significantly disrupted operations.

“We had a week in May when, for four consecutive days, we suffered bird strikes. Every single day for four days, we lost an aircraft to bird strikes,” he said.

“The impacts vary. Sometimes the radome is destroyed; other times, birds are ingested directly into the engine. When you lose four aircraft out of a fleet of nine in quick succession, the commercial consequences are enormous.”

Olawuyi said beyond the immediate revenue losses, bird strikes also expose airlines to operational disruptions, passenger compensation costs and potential long-term reputational damage.

He consequently called on the Federal Airports Authority of Nigeria (FAAN) to deploy modern wildlife management and deterrence systems across airports, particularly during bird migration seasons.

According to him, the industry cannot afford to wait for a major accident before taking proactive measures.

On fleet expansion plans, Olawuyi disclosed that while United Nigeria Airlines currently owns all aircraft in its fleet, future regional and long-haul operations may adopt a leasing model to minimise capital exposure.

“If we decide to launch long-haul services, we will not immediately spend over $200 million to acquire an Airbus A330 without first testing the market,” he said.

“We will likely adopt dry leasing arrangements to establish proof of concept and manage our financial resources prudently.”

The airline executive also raised concerns over infrastructure limitations at major airports, particularly at Lagos’ Murtala Muhammed Airport Terminal Two (MMA2), noting that congestion and inadequate apron space continue to hamper operational efficiency.

He said the existing airport terminal designs do not adequately support seamless passenger transfers between domestic and regional flights, thereby limiting the development of effective hub operations.

“When you get to the airport between 6:00 a.m. and 8:00 a.m., there are days it takes as much as 15 minutes just to taxi out because several aircraft are competing for the same limited apron space,” Olawuyi said.

“Resource limitations remain a major challenge. New airlines are entering the market, but everyone is still depending on the same infrastructure.”

He nevertheless commended ongoing efforts by the Minister of Aviation and Aerospace Development, Festus Keyamo, to modernise airport facilities, while stressing the need for further infrastructure expansion to support the industry’s growth.