Nigerian air travellers, including travel and tours practitioners are in for tougher times as leading foreign flag carriers have flagrantly ignored calls to lower fares on most international routes despite the naira appreciation against other convertible currencies.
The affected airlines had jerked up their fares by between 70-100 per cent or more, in 2016, following the nation’s economic recession, and huge devaluation of the naira. The airlines had cited an acute shortage of foreign currencies and their inability to repatriate ticket sales to their home countries for the rate hike.
At the peak of the currency crisis, passengers were made to pay between N500,000 and N800,000 on economy tickets that sold for half the above prices for a trip to the United States of America, for instance.
It was the same scenario for a trip from Lagos – London or Abuja – London as fares also doubled to between N250,000 and 400,000 for economy seats. In the pre-recession era, airfares on the Lagos – London route was as low as N150,000. Similarly on the Lagos – Dubai route, it sold for as low as N110,000 on some airlines in 2015, even as passengers now pay above N180,000, and in some cases N230,000 for such trips.
But because these premium rates are often difficult to raise in a time of recession, it really discouraged many businessmen from travelling, and those who dare to pay do so in pain.
However, with the recent appreciation of the naira through the forex interventions of the Central Bank of Nigeria (CBN), many had hoped that the airlines would also lower their fares to reflect realities of the market. But all indications today point to their continuous disregard of demand and supply forces.
In the last few weeks, for instance, the naira has ebbed from a peak of N520 to the dollar to about N367. Yet international airline fares have not witnessed a commensurate drop as Nigerians have continued to pay premium rates even on economy tickets. Aviation stakeholders told Daily Sun, they were shocked foreign airlines have refused to obey the laws of fair competition to the detriment of Nigerian travellers who continue to pay more for airfares on routes that attract far less fares in neighbouring Ghana and Togo.
On the face of it, the airlines have very good reason to perpetuate their rip offs since Nigeria does not have a national flag carrier to compete with them. An industry data released in 2015 that captured activities in the preceding 20 years showed that Nigeria’s aviation industry was worth $83 billion annually but sadly, the data also showed that local airlines had dropped from an initial 12 per cent control of the market to only 3 per cent shares in the last 20 years, while foreign airlines controlled the balance of 97 per cent.
A 2016 data from the National Bureau of Statistics (NBS) also showed that no fewer than 15.2 million air travellers went through Nigeria’s airports in 2016 with 72 per cent being domestic passengers travelling within Nigeria, while the remaining 28 per cent were international passengers.
Another data from the Nigerian Civil Aviation Authority (NCAA) revealed that the foreign airlines that flew into the country in 2016 raked in about N302 billion in ticket sales with Emirates making N50 billion, while British Airways earned N48 billion. But Nigerian carriers earned less than half of that figure showing that the high cost of airfares came with a huge impact in the economy.
The immediate impact, as expected, is that imported goods’ prices also doubled with importers pushing the exorbitant cost of air tickets to final consumers. But that is not all; high airfares has had dire consequences on hundreds of Nigerian businesses, especially prospective or new business owners, by hampering many from travelling offshore, either in search of foreign partners or to purchase new machines or spares for local factories.
President for the National Association of Nigeria Travel Agencies (NANTA), Mr. Bankole Bernards, who spoke to Daily Sun on the trend, said it was not only the Nigerian passengers that were badly hit by the high cost of airfares, but the travel and tour agents industry too, he said.
“The high cost of air tickets is not only affecting the travellers but our members’ revenue is also negatively impacted because we thrive when more people travel,” said Bernards.
“We need government to step in to create a better environment for passengers and other aviation industry investors while taxes should be lowered; infrastructure at the airports should be improved and the exchange rate default going on in the industry where the rate you buy cannot be the same rate at the point you want to remit back home should be stopped. But above all, I think we need a national carrier that will provide that sort of competition that can always force down prices to reflect economic realities on the ground,” he added.
A passenger, Mr. Essien James, said, “the airlines said airfares had gone up because the naira was appreciating and that they could not repatriate funds back home from Nigeria. Today, I am so worried that airfares have not been reduced on international routes to reflect the appreciation in the value of the naira even as they now repatriate funds easily home.
“I wanted to get an air ticket to Atlanta, USA, for the summer holiday and the fares in all the airlines going that way are above N550,000, while Delta is charging over $2,000, which is outrageous. I think regulators should step in and protect passengers’ right,” James told Daily Sun at the Lagos airport.