The Untold Hardship Arising from Aviation Fuel Scarcity

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The shortage of aviation fuel has not only hampered flight operations in the last two weeks, It has left air travellers waiting endlessly at the airports, with airlines counting their losses, writes Chinedu Eze

What is surprising about the protracted scarcity of aviation fuel, known as Jet A1 is that it was deregulated, just as Automotive Gas Oil (AGO) commonly called diesel and Dual Purpose Kerosene (DPK). Yet, since the fuel scarcity that paralysed economic activities in the country, AGO has been available, whereas Jet A1 has been scarce like petrol, which is not deregulated.

Operators estimated that domestic airlines have lost over N4 billion in revenues since the scarcity and their equipment are underutlised, and this has its technical consequences.

Many have explained that although the product is deregulated, it is supplied by a cartel that collectively import it and sell at an agreed price and when some of the oil marketers record losses in engine oil, kerosene and other products, they make up their balance sheet with profits made from the sale of Jet A1, which as a cartel, they determine the prices.

But in the last three weeks, airlines have suffered losses. THISDAY investigations revealed that almost all the domestic carriers cut back their operations and that gave rise to huge financial losses, underutilisation of their fleet and delays and cancellations, which further depleted their revenues as some passengers who could not wait demanded refund and cancellation means that the turnover was not met.

In the last two weeks also, passengers had hard times with the airline as there was uncertainty most of the time whether fuel would be made available for the operations and whether flights would be cancelled.

THISDAY investigated activities at the domestic airport terminal and the General Aviation Terminal (GAT) at the Murtala Muhammed International Airport, Lagos and discovered that ground staff of airlines and those in charge of operations had to sweat to source fuel for their aircraft.

Last weekend, for example, many flights were delayed and few were cancelled because airlines could not receive the volume of aviation fuel they needed to operate all their flights as scheduled.

The same situation continued on Monday through Wednesday as respite seemed to be well far off and the airlines continued to cut down schedules.

THISDAY gathered that due to the paucity of the product, oil marketers adopted the system of rationing it to airlines and share the product at the ramp, from one aircraft to another.

So airlines position their aircraft, hoping the fuel would not exhausted by the time it would be their turn to take the product as the bowsers move between the airside of the General Aviation Terminal (GAT) to the domestic terminal, known as MMA2 of the Murtala Muhammed International Airport, Lagos

Last Sunday, THISDAY witnessed anxious passengers craning their necks to look at the airside to see which aircraft that they already had the boarding pass were being fed by the bowsers.

An official of one major domestic carriers told THISDAY that the fuel scarcity was affecting all the airlines and it caused delays and cancellation, adding that it was beyond what airline management could handle.

“So we just ensure that we carry out the important flights to different destinations as we get fuel,” he said.

A head of cabin crew, known as purser, told THISDAY that the scarcity was affecting their work routine and creating uncertainty “because it was when there was fuel that one would be sure one would fly.”

“So whatever plan your may have or your airline may have must be determined by the big ‘IF’; if we get fuel,” he said.

An Arik official told THISDAY on Tuesday that the airline, which operates 120 flights per day at the peak of operation and required about 1.2 million litres of fuel for its flights could only source about 700, 000 litres, sometimes less and this has impacted on its flights and made the cut back on operations inevitable.

Also, Dana Air, Medview, Aero and First Nation Airways delayed flights during this period of scarcity because of inadequate supply of aviation fuel.

“We have not been operating at full capacity since the scarcity started. Ordinarily, we should be operating 120 flights a day but we have cut back because of inadequate supply of aviation fuel. Also our aircraft are underutilised and it costs an airline more to have his aircraft on ground. That is the challenge we are facing,” Arik source told THISDAY.

Meanwhile, airline operators have urged passengers to expect more delays or cancelled flights as scarcity of aviation fuel persists.

Total, So Aviation and other marketers that supply aviation fuel to airlines have been having hard time offloading the product from the port as priority is given to the tankers carrying petrol. But with the local refineries producing about seven million litres of petrol per day, it would be a respite for marketers to clear their Jet A1 cargo, instead of queuing beside the ones hauling petrol.

Part of the reason why there is Jet A1 scarcity was that they cargo was not offloaded as it arrives to the Nigerian port; rather, it had to wait for the ships with petrol to offload.

THISDAY learnt that in response to the fuel scarcity, foreign airlines devised the strategy of fueling their aircraft outside Nigeria and only top up on arrival in the country.
Another challenge the airlines are facing, THISDAY learnt is the delay in trucking the product from Apapa, which could last for hours and when it arrives the airport the airlines would wait for another two hours for the product to settle so that contaminant would not be fuelled into the aircraft tanks.

“Yesterday I called Total and they brought fuel from Apapa but it had to wait for two hours for it to settle down; otherwise it will be contaminated and you know, it can cause accident,” a top airline official told THISDAY

Appraising the consequence of the scarcity of aviation fuel, the industry consultant and CEO of Belujane Konsult, Chris Aligbe said it was unfortunate that none of Nigerian airlines at this moment could produce aviation fuel, so the airlines would still have to depend on importation.

Aligbe noted that the operators that bore the brunt of the scarcity are the Nigerian airlines, “because foreign airlines have been tinkering fuel from other places for some time now because of the fuel scarcity in Nigeria and the high prices of the product.”

He said the domestic carriers are losing revenues and this would affect their profitability and liquidity, adding that aircraft should be in the air and anytime the aircraft is on ground the airline is incurring a loss.

“No airline is finding this comfortable and it is affecting all the airlines; government is also not finding it comfortable and as the scarcity continues the airlines will be put in a situation that they will need some cushioning from government in order to sustain their operation.

“Government should be ready to say to the airlines, sorry; what happened was not your fault; is there anyway we can help you?’ otherwise it will affect the operational ability of the airlines and consequently the economy of the country,” Aligbe said.
He observed that everything must be done to stop the scarcity now because both the passengers and the airlines are suffering, adding that airline business is critical because the movers and shakers of the economy must have to travel by air.

Unfortunately the protracted fuel scarcity came at a time the airlines were literally battered by a slump in the value of Naira, which is making it difficult for them to raise money to carry out maintenance and replace of aircraft parts, including essential training which require to be serviced in foreign currency that is dollar dominated.

The airlines had earlier cried to the government for help but what the airlines are going through has exacerbated their fiscal challenges and makes the help inevitable.

The Executive Chairman of Airline Operators of Nigeria (AON), Captain Nogie Meggison recently said the airlines are in dire need of government support; not necessarily financial support but in the downward review of charges and other forms of support.

“As they say, if you conquer the sky you have conquered the ground, so we are looking at where the government will come in with us, not to really subsidise but to partner with us the airlines at this time and cushion the effects of the devaluation. We are the only transportation in Nigeria that is paying VAT, we are the only airline industry that I know in the world that is paying VAT, even the British Airways and the international carriers that are flying into Nigeria do not pay VAT,” Meggison said.

He explained that in trying to pay all these five per cent, two per cent, this levy and that one, “it ends up being bulky on the passengers, and we all need to think about Nigeria right now and that is why we the airlines are thinking more for Nigeria.”

He said the charges include VAT, customs duties, Federal Airports Authority of Nigeria (FAAN) charges, landing, parking, navigation; terminal service charge (TSA).

“We need to really look at them. For example, I pay you TSA; meanwhile, you are not even providing any service to the passenger, and I need to still pay the service to transport my passengers on the airside to the aircraft and I am paying you for that service or I am paying you 2.50k to pass fuel through the hydro system and the hydro system is not in use. And we know there is no hydro system in this airport for the past 10 years. So, all those things need to be taking out. If you are not providing the services then don’t bill for it because right now everybody needs to tighten his belt,” Meggison said.

Stakeholders have advised the government to find a permanent solution to the perennial aviation fuel scarcity by ending the trucking of the product. Fixing the Mosimi-airport pipeline and reviving the hydrants at the Lagos airport, will be the solution.