A sharp decline in the price of aviation fuel has been projected by aviation experts and stakeholders, also known as JET A1. They opined that 50% fall in price of crude oil will prompt a decline in the JET A1, which comprise 40% of operating cost of airlines in the country.
The price of oil has now dropped more than 40% from “a peak of $107 in June”, which prompted the conclusion by the Geneva-based International Air Transport Association, IATA, that net profit of airlines globally would rise to $25 billion (15.9 billion pounds) in 2015, which give a profit margin of 3.2%. IATA represents around 250 airlines accounting for 84% of universal air traffic.
According to aviation experts, the last time a margin nearly that high reported by the industry was in 2010, when it reached 3.1%.
IATA Director General Tony Tyler said “the industry outlook is improving. The global economy continues to recover and the fall in oil prices should strengthen the upturn next year”.
Tyler disclosed that a 3.2% net profit margin does not leave much room for deterioration in the external environment before profits are struck. He also said “Airlines’ spending on fuel will drop to $192 billion in 2015, from an expected $204 billion this year”.
Meanwhile, Aviation unions as well as other stakeholders have called on the Federal Government to brace up and ensure that the sector improves beyond what it attained in 2014.
Managing Director of the Centre for Aviation Safety and Research, Engineer Sheri Kyari said that aviation security is one of the areas that the government should look into by ensuring that security personnel are well trained.
The stakeholders called on the federal government to maintain and improve safety standard attained in the industry this year.