Business

Aviation Fuel: Domestic Airlines Risk Shutting Down Over Rising Price Of Jet A1

Published

2 months ago

April 1, 2024

Kenny

Indications have emerged revealing that some domestic airlines may cease operations over the rising price of aviation fuel, otherwise known as Jet A1.

Given that there has been a sustained increase in the price of aviation fuel over the last two years, airlines have been forced to enhance their operations by raising ticket prices.

In less than eight months, specifically between July 2023 and February 2024, the product’s swinging price saw local carriers struggle with 109 per cent price increment.

The 12 scheduled airlines in the country, including Air Peace, Aero Contractors, Arik Air, Max Air, Azman, Dana Air, Ibom Air, Green Africa, Overland, Rano Air, ValueJet and United Nigeria Airlines, UNA, had made efforts to stay in business, even as the price of jet fuel surged from N629 to N1,316.

With the situation no longer sustainable, some airlines are looking at discontinuing operations, Vanguard has gathered.

Fluctuations

Although efforts to get the price of jet fuel as of press time failed, Chief Operating Officer of Ibom Air, Mr George Uriesi, told Vanguard that it was fluctuating between N1,300 and N1,500.

Uriesi said: “It is a massive challenge because fuel is the major cost. In two years, it has gone from about N200 to N1,500. No matter how prudent an airline is, it cannot absorb that kind of increase in the major cost input. The increase is so massive that it is difficult to attack by raising fares. We think that we have reached the plateau in terms of using fares to absorb all these inflationary issues – the value of naira and increase in price of fuel, which are the two most important components for a domestic airline.

Reached the zenith

“I think we have reached the zenith of how much we can charge higher for people to travel without stopping them from buying tickets. What I can say right now is that the recent strengthening of the Naira was just like an oxygen mask for the domestic airlines because it had reached the point where it was no longer sustainable. I don’t think any other group of airlines in the world faces the challenges that Nigerian airlines face.”

Refining

Managing Director of Aero Contractors, Captain Ado Sanusi, in a chat with Vanguard, also warned that if the country does not start refining Jet A1, the situation might worsen.

He said: “Cost has been skyrocketing and from the normal 35 to 40 per cent of airlines’ cost, it has now jumped to close to 80 per cent. And in some cases, 90 to 95 per cent. It means when tickets are sold, 90 per cent of the ticket goes to buying Jet A1. It’s a direct relationship. When the price increases, cost increases.

“Airlines increase the prices of their tickets and transfer the cost to the customer. Until we start refining jet fuel in the country, we will depend on imports. While we are depending on import, we are looking at the cost with a naira to dollar exchange rate. I don’t know whether Dangote and Port Harcourt refineries are equipped to refine Jet A1, but even if they are, it would take a little bit of time before we feel the impact.”

Cartel

While calling on Federal Government to make importation of jet fuel transparent, Sanusi said: “If the federal government can make the importation as transparent as possible, I think it will give the airlines a picture of what the price will be. If the price can be published by the Department of Petroleum Resources, DPR, we will know the price and that there is no cartel fixing the price. If they do that, I think it would stabilize the price because right now, some airlines are struggling and some will continue to struggle until they struggle no more and then give up.”

VANGUARD

Business

Naira Slumps, Exchanges At Over N1,500 Against Dollar

Published

3 days ago

May 13, 2024

Editor

The naira continued its depreciation against the US dollar in the foreign exchange market.

Data from the parallel market section and FMDQ showed further depreciation against the dollar on Monday.

At the parallel market, a Bureau De Change operator in Wuse Zone 4, Mistila Dayyabu, told DAILY POST that the naira was sold as high as N1,517 per dollar on Monday before settling at N1,500 per dollar.

“On Monday morning, the dollar was sold at N1,517 per dollar. However, on hearing the information about the coming of the Economic and Financial Crimes Commission operatives, we started selling at N1,500 this evening, ” he said.

The figure increased from the N1, 450 per dollar it traded at the weekend.

Similarly, at the official market, FMDQ data showed that they dipped to N1478.11 per dollar on Monday from N1466.31 last Friday.

This represents an N11.8 drop from the N1466.31 recorded last Friday.

Earlier, the Central Bank of Nigeria Governor, Olayemi Cardoso, said the apex bank’s Monetary Policy Committee will do everything to bring down soaring Nigeria’s inflation, which stood at 33.22 per cent in March 2024.

Business

CAC Opens Centre For Registration Of PoS Operators

Published

1 week ago

May 9, 2024

Editor

The Corporate Affairs Commission has inaugurated a centre for bulk registration of Point of Sale operators in its database.

The CAC Registrar-General, Hussaini Magaji, said this while inaugurating the centre stationed at its Federal Capital Territory Office in Abuja on Wednesday.

According to Magaji, the importance of registering the PoS operators in the commission’s database cannot be over emphasised.

He said the centre was well equipped with all the necessary facilities to operate 24 hours a day and ensure the commission’s achievement of its purpose.

“What we did was accommodate the request from the Fintechs.

“We have allowed them to integrate with the Corporate Affairs Commission; they have developed their structure, and we gave them access.

“Once they supply the necessary details for registration on their platform, the certificate is generally generated and transmitted directly to their platform without them having to contact anyone.

“We have done this to ensure that everyone gets it easy without hitches, but if they choose to apply manually, we have a secretariat open for them to do so,” he stated.

Recall that the Federal Government through the CAC on Tuesday issued a two-month registration deadline to Point of Sales companies, to register their agents, merchants, and individuals with the commission in line with legal requirements and the directives of the Central Bank of Nigeria.

Meanwhile, at the event, the registrar-general reiterated that the centre would be opened to all operators in the fintech industry who voluntarily submitted their agents and merchants for regularisation with the CAC.

Magaji said that the registration was in line with President Bola Tinubu’s desire to ensure financial inclusion for the youth and strengthen the fight against fraud, finance and other crimes in the country.

He further expressed his resolve to ensure compliance with the provisions of Section 863 (1) of the Companies and Allied Matters, CAMA 2020, and the CBN guidelines for Agent Banking, 2013.

On security, the CAC boss said that if a crime were committed using the PoS, the government would easily trace the perpetrators to the CAC data platform if such machines were registered.

“If an incident happens and they report it to CAC, if we do not have the operator’s details, we cannot respond, and that is the essence of this registration.

“The registration ensures that every detail of the person is provided, including NIN, passport photograph and all other useful documents.

“And it is an opportunity for more people to be captured into the formal sector,” he said.

The News Agency of Nigeria reports that the Special Adviser to the President on ICT Development and Innovation, Tokoni Peter attended the event.

The event was attended by Dr Salihu Dasuki, the Special Adviser to the President on ICT Policy Office, the PoS operators, and other stakeholders.

(NAN)

Business

FULL LIST: CBN Publishes List Of Licensed Deposit Money Banks

Published

1 week ago

May 8, 2024

Editor

The Central Bank of Nigeria has released a comprehensive list of licensed Deposit Money Banks operating within the country.

The list, which was made public on the CBN’s official website on Tuesday, provides insights into the banking landscape in Nigeria.

Banks with international authorisation include Access Bank Limited, Fidelity Bank Plc, First City Monument Bank Limited, First Bank Nigeria Limited, Guaranty Trust Bank Limited, United Bank of Africa Plc, and Zenith Bank Plc.

Commercial banks with national authorisation include Citibank Nigeria Limited, Ecobank Nigeria Limited, Heritage Bank Plc, Globus Bank Limited, Keystone Bank Limited, Polaris Bank Limited, Stanbic IBTC Bank Limited, Standard Chartered Bank Limited, Sterling Bank Limited, Titan Trust Bank Limited, Union Bank of Nigeria Plc, Unity Bank Plc, Wema Bank Plc, Premium Trust Bank Limited and Optimus Bank Limited.

Commercial banks with regional licenses are Providus Bank Limited, Parallex Bank Limited, Suntrust Bank Nigeria Limited, and Signature Bank Limited.

Players in the non-interest banking sector with national authorisation include Jaiz Bank Plc, Taj Bank Limited, Lotus Bank Limited, and Alternative Bank Limited.

In the merchant banking category, the apex banks listed, are Coronation Merchant Bank Limited, FBN Merchant Bank Limited, FSDH Merchant Bank Limited, Greenwich Merchant Bank Limited, Nova Merchant Bank Limited, and Rand Merchant Bank Limited.

The financial holding companies listed were Access Holdings Plc, FBN Holdings Plc, FCMB Group Plc, FSDH Holding Company Limited, Guaranty Trust Holding Company Plc, Stanbic IBTC Holdings Plc, and Sterling Financial Holdings Limited.

The Mauritius Commercial Bank Representative Office (Nigeria) Limited was listed as the sole representative office.