Airlines Borrow N60bn as Jet A1 Costs Soar
Nigerian airlines have accumulated more than N60 billion in loans from local banks to finance aviation fuel purchases as soaring Jet A1 prices continue to put pressure on operators.
A member of the Board of Trustees of the Airline Operators of Nigeria (AON), Roland Iyayi, disclosed this in an interview with Sunday PUNCH.
According to Iyayi, some airlines are borrowing heavily just to remain operational.
“There are some airlines that are owing over N60bn from local banks just to be able to procure fuel. That’s how bad it is,” he said.
He said the AON had threatened to suspend operations in February following a sharp increase in aviation fuel prices, prompting the intervention of the Minister of Aviation and Aerospace Development, Festus Keyamo.
Meetings were subsequently held involving the AON, fuel marketers and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), with a committee set up to recommend measures to reduce fuel costs.
However, Iyayi said the recommendations had yet to result in significant government action.
“What we came up with were recommendations to the government to indicate that certain things should be done. But to date, nothing has been done,” he said.
Iyayi also said the high cost of Jet A1 was affecting airlines’ ability to meet their statutory obligations, including the five per cent ticket sales charge payable to the Nigeria Civil Aviation Authority (NCAA).
“All the earnings from ticket sales are put towards buying fuel for the operation,” he stated.
He added that airlines were increasingly operating at a loss because ticket fares had not risen enough to cover the surge in fuel costs.
Meanwhile, United Nigeria Airlines’ Public Relations Officer, Chibuike Uloka, said Jet A1 accounts for about 50 per cent or more of airline revenue, leaving operators with limited funds for salaries, maintenance, taxes and other expenses.
“If 50 per cent accounts for your fuel, you’re probably running at a loss,” Uloka said.
The aviation fuel crisis worsened after Jet A1 prices reportedly rose from about N900 per litre on February 28 to N3,300 in April 2026, following the escalation of the Middle East crisis.
Although the Federal Government announced a 30 per cent relief on airlines’ historical debts owed to aviation agencies and ordered discussions on a fair Jet A1 price, operators say significant financial pressure remains.
Airlines continue to warn that high fuel prices, multiple taxes and rising operating costs could threaten the financial stability of Nigeria’s aviation industry.