Market News
Airlines under pressure after jet fuel surges 100%
There are indications that airfares may jump in the coming weeks following the hike in the cost of aviation fuel, commonly referred to as Jet A1, a development that is already putting pressure on airline operations and signalling higher ticket costs for passengers.
The spike in JetA1 price is largely due to the crisis in the Middle East, which has slowed the production and movement of crude oil across countries, worsening the operational cost of domestic carriers.
Checks by our correspondent with airlines showed an astronomical increase in the operating cost of airlines, particularly caused by the spike in aviation fuel, which has become the dominant cost driver in recent weeks.
At the time of filing this report, aviation fuel, which was sold between N900 and N995 before the Middle East crisis commenced, has jumped to between N2,500 and N2,700, depending on the airport of delivery, sharply raising the cost burden for operators.
Operators said they were monitoring developments, stressing that an increase in airfares was imminent, with strong indications that the prices of air tickets might double if the current trend persists.
Aviation fuel remains the single highest component of airline operations, accounting for about 30 to 35 per cent of total operational costs, a figure that industry players say is rising rapidly under current market conditions.
Airline sources said the price of the product had remained unstable since February 28, 2026, when the war started in Iran, changing about five times since that time, further complicating planning and pricing decisions.
The spokesperson for United Nigeria Airlines, Chibuike Uloka, challenged the Federal Competition and Consumer Protection Commission to urgently engage domestic airline operators over the sustainability of current ticket pricing amid rising operational costs.
The FCCPC recently accused airlines of price fixing, with special attention on five unnamed airlines. This was, however, dismissed by the airline operators.
Uloka noted that despite aviation fuel prices soaring beyond N2,000 per litre, many carriers had continued to maintain fares at around N195,000, raising concerns about how long such pricing could be sustained under prevailing economic conditions.
He, however, warned that the situation could deteriorate further if fuel prices get to N3,000 per litre, stressing that not all airlines would be able to remain in operation under such pressure, a development that could further shrink capacity and push fares even higher.
He said, “Honestly, this is a very good time for FCCPC to come out and ask operators how they have been able to sustain flight tickets at N195,000 despite the increase in aviation fuel crossing N2000 and above. They should please ask how operators have kept on with operations? These are hard times. But most definitely, the current prices can’t be sustained for long periods.
“If this continues the way it is, because the way we are now, the price is also getting to N3000 per litre, and if it eventually gets to N3000, not all operators will be able to fly. And the ones that will be able to fly will not be Father Christmas. What we are asking now is not even profit, but at least to be able to operate optimally. Aviation has become a daily necessity because people must be able to move from one place to another. But FCCPC must be able to come out now and ask operators how we are faring.”
The PUNCH understands that Nigeria has been unable to produce enough crude oil for the Dangote Petroleum Refinery, forcing the indigenous refining company to import crude.
Crude prices have jumped from $65–$69 to about $112 per barrel as of the time of filing this report, further worsening the cost of aviation fuel and pushing airlines closer to inevitable fare adjustments.
This effect has also upped gantry prices, with operators warning that sustained increases will ultimately be transferred to passengers through higher ticket fares.
Industry expert, Samuel Caulcrick, projected an imminent rise in airfares, attributing it to the growing burden of operational costs on airlines, which is increasingly being driven by the surge in aviation fuel prices.
He explained that current market conditions suggest that operating expenses have surged significantly, with aviation fuel now accounting for about 45 per cent of total airline costs, making it the single largest cost component in the sector and leaving operators with little choice but to adjust fares.
Caulcrick noted that the shift in cost structure marks a departure from previous years when maintenance expenses dominated airline spending. However, the persistent increase in the price of Jet A1 fuel has altered the dynamics, placing greater financial pressure on operators and inevitably influencing ticket pricing across the industry.
He stated, “Before now, the highest component of airline operation was maintenance, but that has changed with the continuous rise in the prices of Jet A1. In those days when aviation fuel was less costly, the maintenance cost was higher, but now fueling has taken over.
“If that component goes up, it will definitely affect the prices of every seat. But we should expect the airfares to go up by 20 to 25 per cent in the coming days.”
