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How soaring domestic airfare is crippling local tourism

By DailyTimesNGR DailyTimesNGR 3 November 2024 33 No comment

Ever increasing fares on the domestic air routes has become the greatest threat to a robust local tourism sector, writes Gabriel Agbeja.

Air Peace Airline made headlines recently with a purported 100 per cent increase in its airfare allegedly billed to start from Novovember 1, 2024.

By the increase, one-way tickets in Business Class was projected to cost N400,000 while those in economy class will cost N300,000.

Although, Air peace, the leading airline in Nigeria has debunked the news the prevailing cost of a one-way ticket is almost the amount, a development that has taken air travel out of the reach of the middle class.

According to a report by National Bureau of Statistics, (NBS), in August 2024 the average fare paid by air passengers for specified routes single journey was N123,700.14, showing an increase of 25.51 per cent compared to previous month.

On a year-on -year basis, the fare rose by 56.56 per cent from N79,011.38 in Aug., 2023.

In the NBS’s Sept. 2024 report, the average fare paid by air passengers for specified routes for a single journey was N124,693.40, showing an increase of 0.80 per cent compared to the previous month of August.

The September airfare rose by 57.81 per cent from N79,013.48 in Sept. 2023.

Stakeholders in the aviation sector have decried this development, contending that air travel is no longer sustainable for many Nigerians.

Airline operators have cited several factors contributing to the price hikes, including volatile exchange rates, skyrocketing aviation fuel costs, increasing fees from aviation agencies, and frequent delays from air traffic control.

These issues, according to them are negatively impact on operational costs.

They contended that, imbalance of demand and supply, especially during peak seasons, along with insufficient airline capacity, has further exacerbated the situation.

According to them, high insurance costs and dollar shortages, which has made plane acquisition and maintenance far more expensive for domestic carriers are also attributable to skyrocketing flight tickets.

They submitted that, in the last few months, only few aircraft had to fly several passengers on domestic routes as Nigerian airlines struggle with fleet reduction due to the high cost of maintenance.

Speaking at a forum recently in Abuja, Group Capt. John Ojikutu, Chief Executive Officer, Centurion Aviation Security and Safety Consult, said the cost of domestic air travel soared as a result of high cost of maintenance and other pertinent reasons.

According to Ojikutu, the Naira depreciation policy of the government, which lowered the currency exchange rate to Dollar, has negatively affected the industry and airfare.

“In the 80s and early 90s the average local airfare within the country was between N3,800 and N4,000.

That was when the exchange rate was N40 to a dollar and that was when fuel was refined in Nigeria,’’ he said.

Ojikutu suggested that steps should be taken for the aviation sector to make dollars in the domestic commercial markets, to compete with the foreign airlines.

According to him, aviation services providers both public and private are collectively making over 1.5 billion dollars annually from the foreign airlines.

“The Domestic Airlines can venture to make an additional 50 per cent of that, in foreign currency for themselves.

“This can be achieved if government should restrict each of the foreign airlines to either fly to Lagos or Abuja.

“The foreign airlines would then interline with the domestic airlines to transfer international passengers transiting to and from other airports to the choice-airport of the foreign airlines.

“By this arrangement, the domestic airlines will collect dollar as fares; not less than 100 dollar for the transiting passengers from the foreign airlines.

“That alone will generate not less than 200 million dollar annually, from the average of about five million International passengers,” he said.

Mr Abdulmalik Jibreel, the General Manager, Ground Operations and Commercial UMZA Aviation Services, said that the status of insurance costs and dollar shortages contributed immensely to increase in domestic flight tickets.

According to Jibreel, airfares have surged dramatically, with some tickets now costing upwards of N200,000.

Jibreel observed that the significant increase in global oil prices had directly impacted the cost of aviation fuel, leading airlines to pass such costs onto their consumers.

“Also, the general rise in inflation rates affects all aspects of the airline industry, including operational costs, maintenance, and staff related issues.

“Ongoing global supply chain issues, exacerbated by geopolitical tensions and the aftermath of global warming, have led to delays and increased costs for parts and services.

“The depreciation from unstable currencies has made foreign aircraft maintenance and fuel purchases more expensive,” he added.

The general manager called on the Federal Government to strengthen efforts in working with the airlines to provide subsidies or tax relief to help stabilise prices and make air travel more affordable.

Another expert, Mr Akinola Odugbesan, said aviation fuel constitutes 60 per cent of operation cost for domestic airlines in Nigeria.

He said the price of Jet A1 has tripled over the years jeopardising surviving of domestic airlines

According to him, one major cause of increase in Jet A1 is reliance on import coupled with devaluation of Naira and shortage of forex.

Odugbesan said the news of the coming on board of the Dangote Refinery excited industry players, who believed that local production would bring down the cost of aviation fuel.

He, however, lamented that the expectation was becoming a mirage, because, with local production, the cost is going higher rather than reducing

Some passengers who spoke at the Nnamdi Azikiwe International Airport, bitterly complained about high cost of airfares to their various destinations.

They urged airlines to invest in more fuel-efficient aircraft and explore alternative fuel sources to mitigate rising fuel costs.

Mr David Okoro, who was to board an Air Peace flight from Abuja to Lagos, in an interview, appealed to the federal government to streamline regulatory processes.

According to him, such a move will, definitely, help to reduce operational costs for airlines and enable them to keep ticket prices more competitive.

Alhaji Abass Muhammed, who spoke on the queue at Max Air Counter, said travelling by air had never been for the common man.

He, however, said it was unfortunate that it has worsened, as many middle class could no longer afford airfares.

Muhammed said many people had accepted to take another mode of transportation to their various destinations.

He canvassed consumer education, pointing out that, informing travelers about the best times to book and potential discounts, could help them find more affordable options.

The traveler urged airlines, travel agencies, and government bodies to collaborate to develop strategies that ensure sustainable pricing without compromising service quality.

According to him, implementing such effective strategies would help to stabilise airfares and make travel more accessible for everyone.

The Federal Government and other stakeholders should see air travel as a catalyst to economic growth and all efforts should be made to make it accessible to the people.

The Nigerian Civil Aviation Authority (NCAA) tasked with regulating airfare pricing should wake up to its responsibility of regulating arbitrary increase in airfare.

QUOTE:

On a year-on -year basis, the fare rose by 56.56 per cent from N79,011.38 in Aug., 2023.