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‘Seun Ibukun-Oni, Abuja

 

Daily Courier – The Mohammed Hayatu-deen Campaign Organisation has lamented that the announcement by the airline operators in the country that they would shut down domestic flight services was not only disturbing but a sign of a failing economy.

A statement signed by the organisation’s director-general, Senator Isa Galaudu, quoted the Peoples Democratic Party (PDP) presidential aspirant, Mohammed Hayatu-deen, as saying that the reason for the lamentable situation was 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,” Hayatu-deen was quoted as saying.

Hayatu-deen said this was 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,” he added.

Hayatu-deen, therefore, advised 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, he noted, was the immediate need for a massive increase in supply by an import intervention to push down prices and stabilise the market, saying the other being a more fundamental and strategic move to address the structural imbalance of the industry.

He said this would 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,” he said.

Hayatu-deen added Nigerians were already feeling the weight of excruciating economic and social problems, and they do not deserve to be placed under additional unbearable stress.