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    Foreign Flights To Nigeria Forced To Refuel Elsewhere

    LAGOS/ABUJA, Sept 13 (Reuters) - Foreign airlines flying to Nigeria have started to refuel abroad to bypass pricey, and increasingly scarce, jet fuel as the oil producer battles a hard currency shortage that has made fuel available only at a veryhigh price.

    It is the second blow for airlines operating in Africa's recession-hit biggest economy in a year that first saw the central bank make it almost impossible to repatriate profits from ticket sales as it tried to prevent a currency collapse. The crash in the naira since a devaluation in June has led firms who market jet fuel locally, such as Total, Sahara and Conoco Phillips, to double the price to 220 naira a litre in August, and to as much as 400 naira this month, an airline executive said.

    Even at the higher costs, marketers' lack of dollars hasmade fuel scarce. Some carriers have had aircraft stuck, or wereforced to cancel planned journeys, after frantic last-minutecalls from ground staff warned there was no fuel available.

    "The economy is crying out for investment, and now it isgoing to be even harder for anyone to visit," said JohnAshbourne, economist with Capital Economics. "Who is going towant to park a billion dollars in a country that you can't eveneasily fly to? It sends the worst possible signal."

    A spokesman for state oil company NNPC did not answer callsfor comment.

    The central bank hoped floating the naira would attractdollar inflows, but the naira sunk by 50 percent, forcing oilfirms to charge airlines, stuck with piles of naira, in dollarsfor jet fuel.

    "It's an impossible situation. The oil marketers don't wantto sign long-term agreements anymore so we have to acceptwhatever prices they demand," one airline executive said. "Wesell tickets in naira and now they want us to come withdollars."

    Spain's Iberia and United Airlines cancelled their Nigeriaservices earlier this year, and two local carriers also haltedoperations. Other international airlines responded by boostingticket prices within Nigeria, charging its globe-trotting eliteas much as $2,000 for an economy class ticket to Europe to cutlosses - more than double the cost of a Lagos ticket boughtabroad. WELL-HEELED PASSENGERS

    Dubai-based Emirates has started a detour to Accra, Ghana,to refuel its daily Abuja-bound flight, a spokesman said. Theairline already cut its twice-daily flights to Lagos and Abujato just one.

    The move was aided by a substantial drop in Ghana's jetprices amid tax reform last month, according to the GhanaChamber of Bulk Oil Distributors.

    Air France-KLM said it had refueled abroad in "veryexceptional cases" by juggling suppliers and stomaching extracosts.

    Germany's Lufthansa is loading more fuel in Frankfurt forits Lagos flight, where the ground staff doubt their ability torefuel for the final destination of Malabo, the capital ofEquatorial Guinea, an executive said. The airline did notrespond to official requests for comment.

    The scarcity has even pitted airlines against localconsumers; a surge in demand for cooking and heating keroseneduring the rainy season, when households cannot easily burn woodor charcoal, means if the airlines do not pay up, marketers willsell to locals.

    Airlines met with transport ministry officials last week inAbuja to press for fuel at lower prices, industry sources said.

    Nigeria used to be one of the most profitable markets forforeign airlines, landing planes with plenty of first and business class to cater to executives and officials jetting around under former President Goodluck Jonathan.

    President Muhammadu Buhari cut air travel allowances forofficials in a bid to tackle graft; others simply have lessspending power with consumer inflation running at an 11-yearhigh of 17 percent.

    British Airways, a popular choice for well-heeled Nigerians,said it is using smaller aircraft on its Lagos-London route, asdid Air France-KLM.

    Turkish Airlines' use of smaller planes has added anotherinconvenience: passengers complained there is not always spacefor luggage on the smaller aircraft, delaying it for days. Theairline did not respond to requests for comment.
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