Rising jet-fuel prices for global carriers will make it harder for airlines to reach cash-positive positions in the coming months, industry regulator, International Air Transport Association (IATA) has said.
According to the global airlines’regulator carriers are staring down a long road back in the wake of a veritable cliff dive in travel demand.
To reduce operating costs, which is driven by the cost of fuel, airlines in Nigeria and carriers in other parts of the globe, are strategising on fleet renewal.
To drive this initiative, some carriers have embraced regional jets, including Brazzillian-Embraer, Canadian Bombardier jets and French propeller jets – ATR.
The choice of these aircraft types, according to investigation, is driven by savings that will accrue for use of fuel economical aircraft.
Many Nigerian carriers, including: Air Peace, United Nigeria Airlines, Ibom Air and yet-to-take – off carrier – Green Nigeria Airways, have shown preference for the use of regional fuel efficient jets.
In an interview, Chief Operating Officer, Air Peace, Mrs OluwaToyin Olajide, said 30 Embraer jets ordered by the carrier, considered the huge costs that will be saved on jet fuel consumption, Olajide said the airline invested in Embraer aircraft type because of its super-efficiency and fuel economy.
She said: “This is because a lot of money will be saved as regards the operating cost. There are savings on fuel; bearing in mind the high cost of aviation fuel in Nigeria. These aircraft coming into the country will help lower operating costs.”
Also, former president of the National Association of Aircraft Pilots and Engineers (NAAPE), Isaac Balami, said the local airlines and investors were waking up to the realities by acquiring good equipment for long-term returns.
Balami, an engineer and CEO of 7 Stars Global Hangar, affirmed that Nigerian carriers had been using the medium-range aircraft for short-haul domestic flights because of low fuel consumption.
On his part, Chairman of the United Nigeria airline, Obiora Okonkwo said the investment in smaller airplanes is strategic because of its impact on lower fuel consumption which drives down the cost of running the business.
Ibom Air on its part said it settled for the use of Bombardier CRJ900 aircraft because it is suitable for the needs of air travel in Nigeria, its Chief Operating Officer (COO),Mr George Uriesi disclosed.
According to Uriesi the aircraft type, besides being cost effective , is the only equipment suitable for the route and operational structure developed in the business plan of the carrier.
He said the choice to utilize Bombardier CRJ 900 aircraft was strategic to position an airline that will grow organically , in terms of fleet and route structure.
Uriesi said : “ We looked at the B737 and it is obvious we looked at the economics of the operations of the Embraer and the CRJ900 and eventually we opted for the CRJ.
Meanwhile, the International Air Transport Association has estimated airlines may burn through more than $61 billion of their cash reserves during the second quarter, while posting quarterly net loss of nearly $40 billion.
Some of IATA’s assessments are based on a scenario where severe travel restrictions remain in place for many months.
Many airlines have already tapped into their maximum available credit lines to meet daily operational expenses, with some admitting there are coughing up $50 to $100 million in daily losses.
