Tuesday , 27 September 2022
Murtala Muhammed International Airport by Ken Iwelunmo on Airliner.Net

Consequences of unremitted funds visible as Nigerians pay triple fares on foreign airlines

NIGERIANS now pay triple the fares what other travellers pay for the same destinations amid threat of the international operators to suspend flights, a situation described as a rip off but which was predicted based on the current situation.

In an article written on NIgerianFLIGHTDECK, an expert opined that the reduction of the Emirates frequencies will just be the tip of the iceberg, especially as airlines globally are facing many headwinds at the moment which include; labour cost inflation, elevated Jet A1 prices and increased competition post the Covid 19 period to name a few.

He predicted,”The net effect of the reduction of frequencies will automatically mean fares will increase and will lead to further inflation in the country.

He also said, “Whilst we have a Nigerian competitor, Air Peace, operating into the UAE this may offset some of the increase in prices and may help Air Peace load factors but domestically they are fighting their own battles with a depreciating Naira and increasing fueling cost.

“What about London where we don’t have a Nigerian competitor? BA and Virgin has simply increased their fares and this will be the norm going forward,” he said.

Going by the advertised fares on foreign airlines websites, Nigerians pay over triple even far more than other travellers from countries where airlines are yet to repatriate their revenues pay.

Currently, Nigerian travellers pay over N1.2 million for one way economy ticket for about six to eight hours flight and over N4 million for business class ticket with round trip ticket going for N3 million for economy and N7 million for business class tickets.

According to a national daily’s investigation, foreign airlines do not charge similar outrageous fares in other countries where airlines are yet to repatriate their earnings.

Meanwhile, checks show that countries in Africa that hold on to huge amount of airlines’ revenues as at June, 2022 include Zimbabwe – $100 million; Algeria – $96 million; Eritrea – $79 million, Ethiopia, $75 million and Ghana, which was not listed by IATA in June but had not allowed airlines to repatriate their earnings due to paucity of foreign exchange.

IATA Regional Vice-President, Africa and Middle East, Kamil Alawadhi said airfares charged by international carriers are three times higher than what obtains in other countries that do not retain airlines’ revenues and expressed fear that the fares might continue to rise until Nigerians would not be able to afford international travel and that would eventually weaken the nation’s economy.

Industry expert and the Secretary-General of Aviation Round Table (ART), Group Captain John Ojikutu (retd) said lamented that Nigeria is not keeping to the tenets of the Bilateral Air Service Agreement (BASA), whereby foreign airlines pay royalties for their operations in Nigeria, especially when Nigerian carriers do not reciprocate the same service to the host countries of those airlines.

He equally said, “What has been happening over the years in the Nigeria commercial aviation policies, regulations and administration are nothing but what I call unilateral exploitation of the systems? We are going to be the loser if the foreign airlines withdraw their services of flights to our country because about 70 to 80% of our earnings in commercial aviation are from the foreign airlines. What will happen further will see Nigerians going to Accra, Cotonou, Lome, etc to connect the flights of these foreign airlines making them hubs over Nigeria.

“I saw these happening to us when a Minister unilaterally cut off the Commercial Agreements between us and them and when we indirectly open the domestic routes and markets for some of them for multiple destinations.

“The consequences are staring on us all; now who will save us from ourselves?” Ojikutu said.

Industry analyst and Director, Research, Zenith Travels, Mr. Olumide Ohunayo said, “We are being charged the higher rate because we have the highest figure among the debtors. Secondly, we do not have the capacity to reciprocate of those routes so the dominant carriers determine the fares. Nigeria has a very strong travel population, so we have a lot of supply, which outweighs the demands currently as airlines cut frequencies. Also, the naira continuous spiral fall is affecting the overall costs of the tickets.

Ohunayo also explained that most of the travels in Nigeria are sponsored by the public and others that can actually afford it are those who have it.

“You see that there are more demands for the business and higher economy class. So since these higher classes are being demanded here, these airlines tend to push fares in line with those demands so that the next available ones will also be a bit higher. So the airlines are using this market forces to push prices as well,” he said.

About NigerianFlightDeck

Nigerianflightdeck is an online news and magazine platform reporting business stories with a bias for aviation and travel. It is borne out of the intention to inform, educate as well as alter perceptions with balanced reportage.

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