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Nigerian travellers pay more for foreign flights; multiple taxes, high operational costs responsible

By on September 27, 2013

The disproportionate airfares being paid by passengers travelling from Nigeria to major destinations in the world and those being paid by travellers from neighbouring countries for flights of similar distances is unsettling aviation stakeholders in the country.

For instance, Nigerian travellers have been paying higher airfares when compared to their counterparts from neighbouring West African countries to fly to equidistant destinations in Europe and the Americas.

The development has been attributed to some major challenges facing the Nigerian aviation sector and the seeming unwillingness of the government to do something about them.

Findings by our correspondent showed that despite attempts by the major stakeholders in the sector to reverse it, the trend had continued unabated as Nigerian travellers were still paying about N100,000 more than nationals of other countries for flights on similar routes.

Experts, who spoke to our correspondent on the issue, noted that the major causes of the disparity in the fares were multiple taxes that airline operators had to pay in the country, high operational costs and inadequate infrastructure.

For instance, a flight from the Murtala Muhammed International Airport, Lagos to the Heathrow airport in London costs about N810,000 for a business class ticket, while the same ticket from Accra, Ghana, which is about the same distance, costs N717,000, which is about N93,000 less than the fare from Nigeria.

A flight from Lagos to London will take six hours and 35 minutes on the average, while a flight from Accra to London will last for about six hours and 20 minutes, a difference of about 15 minutes.

According to experts, until the government and the relevant airport authorities address some pressing issues, Nigerian travellers will continue to face the challenge of paying higher fares compared to their counterparts from neighbouring countries such as Ghana.

The Chief Executive Officer, Gadeshire Travels and Tours, Mr. Gbenga Adebayo, said the taxes being imposed on foreign airlines by the Nigerian authorities was a major hindrance as the costs were being passed to the passengers.

He said about 40 per cent to 50 per cent of the fares being charged by the foreign airlines went to the payment of taxes.

Adebayo said, “You will notice for instance that the real fare that these airlines charge is about five per cent of the total amount passengers pay, most of the money being paid goes the way of taxation and other sundry expenses, which have to be borne by the passengers.

“I think what the government should do is to ensure that the plans for a national carrier is again revisited and to give more licences to foreign players to come into the country; this will encourage healthy competition, which will in turn bring down fares.”

The President, Association of Foreign Airlines Representatives in Nigeria, Mr. Kingsley Nwokoma, said operating airlines in the country was very expensive and that this was the main reason for the disparity in airfares.

He told our correspondent that a lot of charges being imposed on the foreign airlines operating in the country were being passed on to travellers, adding that the bulk of the blame should go to the agencies involved, which might not be playing some of their roles effectively.

Nwokoma said, “The reason for the disparity in fares is simple; there is the issue of multiple taxes and high cost of airline operation in Nigeria compared with some African countries such as Ghana.

“Most of the agencies do not take statistics of airport charges worldwide compared with what we have in Nigeria; and so, what we have in effect is a situation where the foreign airlines also have to add up these charges, and this of course affects the total fares that passengers have to pay.”

According to him, there is a need for collaboration between the Ministry of Aviation, airlines and aviation agencies to see how the situation can be remedied.

“There is a lot of work to be done by the government; they must sit down with the foreign airlines to find a solution to this and must have an open mindset to look at all the issues in order to find lasting solutions,” Nwokoma said.

 

 

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One Comment

  1. Deroju

    September 27, 2013 at 10:56 pm

    I read this article with much disappointment at the lack of
    adequate knowledge about airline revenue and pricing management.

    As a pricing analyst with over 10years experience in the
    Nigerian Travel industry, I have learnt, worked and have an understanding of
    revenue and pricing management in the travel industry.

    One key element I have observed that we all keep missing out
    in the conversation about air fares is the role the Naira to US Dollar Rate of
    Exchange plays in computation of airfares. All Nigerian fares for air travel
    are stated in US Dollars (universal currency) and only converted to Naira at
    the prevailing exchange rates. These rates are reviewed in line with the CBN
    dollar rates.

    To the best of my knowledge, many foreign carriers have not
    increased the prices of air fares in the last few years. Most of what we see is
    because of the fluctuating value of the Naira to the US Dollar.

    Example: If a ticket cost USD100 and the exchange rate is
    N80:$1 the naira value of the ticket will be N8,000. However, if the rate of
    exchange changes to N120:$1, the value of the ticket will increase to N12,000.

    In view of this, if the Nigerian Naira value against the US
    Dollar continues to increase, then the airfares will continue to rise, without
    any increase in fares from the airlines.

    This is just one of the many factors that influence the
    prices of airfares in Nigeria.

    Thank you for your audience.