Indications suggest that domestic airlines operators could soon be slashing ticket prices for passengers, thanks to the forthcoming supply of aviation fuel, Jet A1, by Dangote Refinery. The recent years witnessed a continual surge in jet fuel costs, compelling indigenous carriers to hike ticket prices to sustain operations.
On February 20, 2022, the 12 scheduled airlines, including industry giants like Air Peace, Aero Contractors, and Arik Air, collectively agreed to implement a 100% airfare hike to offset rising operational expenses. However, with the prospect of a significant drop in Jet A1 prices on the horizon, operators are now considering adjusting ticket prices downward to benefit passengers.
Speaking on the potential price shift, Captain Ado Sanusi, the Managing Director of Aero Contractors, expressed that while the cost of Jet A1 has remained stable, airlines would welcome a decrease in prices. This anticipated shift could mark a positive turn for both airlines and passengers, signaling a potential era of more affordable air travel in the near future. Stay tuned for updates as this story unfolds.
Sanusi asserted that “As operators, we have no idea of the refinery where marketers buy Jet A1, but what we look at is the price. If the price drops, whether it is from Dangote refinery or refineries outside the country, we will appreciate it.
”The price has been steady and that is what we use in making our projections. The price of jet fuel has been between an average price of N1,200 and N1,400 per litre.
“It depends on what price Dangote refinery sells Jet A1. If it sells below the market price, then, of course, it would drop price.
”However, if it is not selling below the market price, there won’t be a drop in price. Meanwhile, it is dependent on what crude oil is being sold to him and how much it costs him to refine. What we think will bring down the price of Jet A1 is the cost of freight.
“If Port Harcourt, Warri and Dangote refineries could give us enough jet A1 for some time and we have steady prices, it will definitely have an impact on price. However, that won’t be possible in a few days. It has to be consistent for a few weeks and even months.” he further said
