Airfares for local travel between major cities in the country has surged by as much as 100% as Nigerians book tickets ahead of the Christmas holiday.
The spike in airfares has shocked a lot of local travelers as they are told that the reason for the increase in ticket prices is due to the devaluation of the naira.
- According to information gathered by Nairametrics from the websites of various Nigerian airlines and travel agencies, an Air Peace flight scheduled to take off on Thursday, 10th December, from Lagos to Abuja, cost as high as N100,528;
- while from Kaduna to Abuja on the same day is around N128,467 for an economy class ticket.
- Also, a flight from Maiduguri to Lagos costs around N128,467, while a return ticket between Lagos and Benin costs around N120,000.
- A flight from Lagos to Enugu departing on the 17th to return after Xmas on the 30th sold for N86,000 but as high as N170, 699 according to checks from Travel Stats.
What Airlines are saying
- Nairametrics had earlier reported that the management of Max Air and Aero Contractors in different interviews, attributed the sudden hike in fare to changes in the exchange rate.
- According to the statement from Mr. Kehinde Ogunyale, the station Manager of Max Air, the Airline increased the fare due to the Dollar to Naira exchange rate and the increase in demand for tickets.
- Also in a similar interview, Mr. Abdulmalik Jibreel of Aero Contractors explained that the high demand for tickets during this period necessitated the increase in fare, coupled with the Dollar to Naira exchange volatility.
- Some airlines also reported earlier in the year that the Federal Airports Authority (FAAN) had increased Passenger Service Charges by as much as a 100% starting August 1.
What they are saying
In a discussion with Mr. Babatunde Akinyele, a Structural Surveyor told Nairametrics that he was forced to postpone his intended travel from Lagos to Benin yesterday when he saw the fare. He stated that he might have to consider alternative means of transportation if tickets continue to sell for that high.
A staff of travel agency whom we contacted revealed economy tickets more than doubled in some major routes mostly due to a surge in demand.
- An economy class ticket from Lagos to Benin (one way) sold for N60,000 while a return ticket for N120,000. Another ticket from Kano to Abuja sold for N95,000.
- Nairametrics also gathers that the increase was mostly because of the high demand for travel tickets, as most of her customers appear to be booking ahead of the Christmas and New Year celebrations.
- Another source suggests the spike in flight tickers could also be because airlines are trying to recover some of the losses incurred during the Covid-19 lockdown.
- Last July, Nairametrics reported airlines planned to increase local travel costs by 50% due to the devaluation of the exchange rate which has impacted their operations.
Nigeria has devalued its exchange rate three times this year already going first from N305/$1 to N360/$1 and then to N390/$1. The exchange rate at the black market is currently at N475/$1 and rose as high as N502/$1 last week.
In a nutshell,
Airfares for local travel have increased (and will continue to increase) for the following reasons;
- FAAN also increased taxes and charges that airlines pay by as much as 100%.
- The multiple devaluations of the exchange rate mean airlines have to spend more on services and replacement of parts most of which are dollar-denominated costs.
- Access to forex is also increasingly difficult as the CBN continues to ration dollar supplies. This has pushed demand into the black market worsening the exchange rate situation.
- Business travels also appear to have dropped significantly as most businesses now rely on online applications such as Zoom and Microsoft Teams to hold meetings.
- This also creates a shortage of passengers for airlines, meaning they have to increase ticket sales to make up for limited roundtrips.
- At N100,000 Nigerians are paying an equivalent of $250 for a trip of less than an hour.