Peoples Democratic Party, PDP, presidential aspirant, Alhaji Mohammed Hayatu-Deen, has warned that the consequences of shutting down domestic flight operations would be dire for the economy.
He also urged the Federal Government to urgently introduce what he described as an import intervention by ensuring a massive increase in supply to push down prices and stabilize the market.
The presidential hopeful said this in a statement by the Director-General, Hayatu-Deen Presidential Campaign Organization, Sen Isa Galaudu.
The statement reads: “The announcement by the Airline Operators of Nigeria that they will shut down domestic flight services is not only disturbing but also disheartening to any patriotic citizen of this great country.
“The reason for this lamentable situation is the escalating price of aviation fuel (jet fuel A1) from N190 to N700 per litre. This represents more than a 250% jump in price at a time when NBS is reporting official inflation of 15%.
“The Hayatu-Deen Presidential Campaign Organization is of the view that this deplorable outcome is another symptom of an economy that is in dire need of rescue from the claws of subsidy agents. The economy is fast approaching failure because of neglect and living in denial of policy makers at a time when industry wide passenger revenue growth is increasing due to the risks and hazards of rail and road travel. As a consequence of this, airlines should be making more money and reinvesting in seat capacity.
“But this is not the case because of pricing distortions and the consequences of a dysfunctional subsidy regime. It is not rocket science to know that jet fuel represents 40% of the direct operating costs of airlines. Therefore a 250% increase in the price of this input has completely eroded the thin margins of airline operators.
“The Hayatu-Deen Presidential Campaign Organization hereby advises the Government as a matter of urgency to embark on a two-pronged approach to mitigate the cataclysmic and systemic risk this development poses to an already fragile economy afflicted by enormous power shortages.
“First is the immediate need for a massive increase in supply by an import intervention to push down prices and stabilize the market. The other being a more fundamental and strategic move to address the structural imbalance of the industry. This will entail fast tracking the revamp of the moribund refineries and accelerating the commissioning of the private refining capacity.
“These together with an efficient review of the failed subsidy system will bring down prices whilst simultaneously increasing output of refined products including jet fuel, diesel and PMS thus bringing the industry into full and dynamic equilibrium.
“The transportation and energy sectors are very critical to productivity, output and employment because of their strong linkages.
Nigerians are already feeling the weight of excruciating economic and social problems, and they do not deserve to be placed under additional unbearable stress.”