body-container-line-1
Thu, 07 Dec 2023 Feature Article

Nigeria's Aviation Industry Losing Millions Of Dollars To Administrative Unconsciousness (2)

Nigeria's Aviation Industry Losing Millions Of Dollars To Administrative Unconsciousness (2)
LISTEN

In part one of the series, ODIMEGWU ONWUMERE examined the improper finances that have jeopardized the Nigerian airline. In part two, he discusses the recent discovery of a significant amount of water in the fuel tank of some aircrafts. This discovery has raised safety concerns within the industry.

The warning issued by the Airline Operators of Nigeria (AON) in 2022 regarding potential disruptions to flight schedules at all airports in the country due to an escalating jet fuel crisis has now become a reality in 2023.

On July 22, 2022, the AON issued a statement warning about the possibility of flight cancellations and delays at all airports due to a severe shortage of aviation fuel, also known as Jet-A1. The AON stated that the scarcity of aviation fuel in the country would result in significant disruptions to plan flight operations, including unnecessary delays and cancellations, at all airports.

Prof. Obiora Okonkwo, the spokesperson for the Airline Operators of Nigeria (AON) and chairman of United Nigeria Airlines, conveyed the message that although this consequence was anticipated, it was not intended. Consequently, the AON kindly requested the public's understanding as their members worked towards resolving the issue and restoring flight operations to normalcy.

Despite efforts to prevent and address operational crises, the fuel crisis in Nigeria persists, putting certain airlines at risk of extinction. One instance of this was on July 17, 2023, when a domestic airline incident occurred in Lagos. During post-refueling underwater inspections, multiple errors were discovered. Another incident happened in Yola on July 7, 2023, where severe water contamination led to an outage in the auxiliary power unit (APU). Similarly, in Abuja on April 28, 2023, the APU stopped functioning due to fuel contamination during engine start. Additionally, an engine failure occurred on a flight in Abuja on April 30, 2023, as a result of a fuel filter bypass.

In response to this incident, the House of Representatives expressed concern and announced their intention to launch an investigation into the issue of aviation fuel contamination in the country. Despite a severe scarcity of flights caused by a shortage of aviation fuel, Nigeria's largest downstream companies are defying expectations and experiencing notable growth in their aviation business, with a revenue increase of 72 percent in the first half of 2022.

In addition to that, available data indicates that the aviation sector in Nigeria is presently encountering a significant threat to its existence due to a severe shortage of foreign exchange (forex) and a sharp rise in the cost of aviation fuel (Jet-A1).

Recent statistics reveal that this situation has been worsened by wealthy Nigerians illicitly taking Jet-A1 fuel for export, resulting in reduced reserves for airlines. Senator Smart Adeyemi has commented on this matter, asserting that those involved in this unlawful activity are not regular Nigerians, but rather well-off and influential individuals who have turned to criminal acts.

They are engaging in large-scale theft, with no justification for the fact that 80 percent of Nigeria's production is being stolen and wasted. Unfortunately, the price of aviation fuel has drastically risen in the past year, going from N200 per liter to nearly N900 per liter. In spite of this challenging situation, reports suggest that some oil marketing companies, have experienced a 72% increase in revenue from aviation fuel.

In the first half of 2022, they achieved N28.6 billion, compared to N16.6 billion during the same period last year. The selection of the Representatives was made after a motion presented by Tunji Olawuyi (APC-Kwara) during a full meeting in Abuja on Thursday, July 20, 2023.

In his statement, he mentioned that the pollution in the primary fuel tanks of the Max Air B737-300 caused the Auxiliary Power Unit (APU) at Yola Airport to shut down on July 7. According to him, Max Air allegedly obtained the contaminated fuel from specific undisclosed aviation refueling outlets, as confirmed by the airline.

In the face of that multiple incidents, no accidents were reported in Nigeria, where airplanes operate on aviation turbine kerosene (ATK), particularly A-1 jet fuel, which is a refined form of kerosene. During a stakeholders meeting in Abuja, Captain Musa Nuhu, the Director General of the NCAA, emphasized the importance of involving all stakeholders in addressing an issue. Although the agency has regulatory authority, they cannot handle the matter alone.

The main objective of their actions is to instil confidence in travelers by ensuring their safe arrival at their destination. In a presentation, Engr. Gbalohan Abalan, the Director of Airworthiness Standards of NCAA, highlighted incidents where the aircraft tank had been filled with water. Engr. Farouk Ahmed, the CEO of the Nigerian Midstream Petroleum Regulatory Authority, also expressed his commitment to collaborating with other stakeholders.

He reassured that they are prepared to collaborate to ensure the availability of high-quality aviation fuel and meet the required standards. The inspections revealed that this incident had a detrimental impact on the sector, which annually contributes to the National GDP. For instance, in 2016, the aviation industry's contribution to the GDP experienced a decline of -4.86% compared to the 2015 figure of N94.5 billion and N60.05 billion using the constant (2010 baseline) and current basic prices.

However, there was a 1.83% increase in 2017, amounting to N61,155 billion and N105.862 billion using constant and current basic prices. This indicates a slim positive future as the economy slowly bounces back from the recession experienced in 2016. Nevertheless, apart from the water contamination in certain airlines' APU, another problem noticed in March of this year was the scarcity of aviation fuel and its influence on flight delays.

Nigeria's reliance on foreign refineries for jet fuel is due to the fact that its four oil refineries do not produce it. In 2017, the country imported 340.33 million liters of domestic kerosene (HHK) and 592.73 million liters of aviation turbine kerosene. Among these imports, 554.61 million liters of aviation turbine kerosene were distributed within Nigeria using trucks and oil tankers. Over the period of 1986 to 2012, Nigeria's daily consumption of jet fuel averaged at 1,253,155 liters. According to a report titled 'Nigeria's Aviation Industry Customer Satisfactory Survey Report 2022' by Philips Consulting Limited, the Nigerian aviation sector spent a staggering $192 billion in 2022 exclusively on aviation fuel.

Additionally, the report disclosed a 70 percent surge in jet fuel costs during the first half of 2022. Moreover, Annie Essienette, the spokesperson for Ibom Air, indicated that the price of aviation fuel fluctuated between N800 and N840 per liter across different cities. These problems are likely attributed to issues with infrastructure and fuel storage.

The cost of jet fuel has increased, with fuel costs totaling $192 billion, making it the industry's biggest expense this year. The ongoing conflict in Ukraine has exacerbated the situation by keeping Brent Oil prices high. The surge in jet fuel prices, which have risen by over 70%, is one of the largest increases since 2022.

This rise in jet fuel prices is a consequence of the surging crude oil prices that followed Russia's invasion of Ukraine in February 2022, leading to an 11% increase in the price of Brent crude oil. Factors such as particles, fuel-consuming microbes, water accumulation, and temperature fluctuations during storage or pumping contribute to the scarcity.

Experts argue that having an adequate fuel supply is crucial for the sustainability of the aviation industry as it accounts for more than 30% of an airline's operating expenses and impacts airfare and profitability.

Nigerian airlines rely mainly on civil grade jet A-1 fuel, and every year they face shortages leading to flight delays, rescheduling, and cancellations due to the limited availability and rising cost of jet fuel. These issues stem from multiple factors including finance, logistics, management, and policy. Experts have noticed that specific oil suppliers inundated the aviation sector with inferior quality jet fuel, causing a drop in prices from N800 per litre to N600 per litre.

The compromise of air safety has been caused by this situation. Regrettably, the absence of pipeline repairs for 31 years, which has been disregarded by entities like NNPC, NCAA, FAAN, and even the airlines themselves, has played a role in contributing to this problem. Engine failure is caused by fuel starvation when the fuel supply is interrupted. Forced landings and accidents involving Control Flight Into Terrain (CFIT) can also be a result of fuel starvation.

Jet fuel contamination leads to engine failure as it damages fuel system components and hinders the fuel supply to the engine. Before 1992, the supply of Jet-A1 to Murtala Muhammed Airport was facilitated by pipelines from either Ejigbo or the NNPC depot. These pipelines were also used to transport the supply from the MMA depot to the hydrants on the apron, where fuel was distributed to aircraft. During this period, there was a strong emphasis on ensuring the quality of the fuel. It was fortunate that a major accident was avoided.

According to experts, accidents are not random occurrences but rather the outcome of a series of events that lead to aviation mishaps. One expert said that in his more than 25 years as an aviator and aircraft engineer, he never encountered such a large quantity of water in an aircraft's fuel tank. Water is the most common impurity found in aviation fuel, as it has a greater density than 100LL and tends to settle at the bottom of the tank.

Influential figures argue that the recent unreliable aviation service in Nigeria, which stands in stark contrast to the failure of public transportation on land and its minimal presence on water, is a cause for national embarrassment. The government and other relevant authorities should feel ashamed.

Given the country's inability to produce essential petroleum products like Jet A1 or aviation fuel, the crisis in the aviation sector should have been foreseen long ago. The scarcity of these products has significantly disrupted the airline industry for several months.

Onwumere writes from Port Harcourt. He can be reached via: [email protected]

Which team do you think has the higher chance of winning the 2024 elections?

Started: 02-07-2024 | Ends: 31-10-2024

body-container-line