Don't Miss


Home   >   Business   >   Industries   >   Aviation   >   Passengers pay 65% of airfares as fuel surcharge

Passengers pay 65% of airfares as fuel surcharge

By on February 14, 2015

Up to 65 per cent of airfares paid by passengers travelling by air across the country end up as fuel surcharge to the airlines.

Investigation by our correspondent showed that the bulk of the amount paid by passengers for domestic trips was categorised as fuel surcharge, also known as YQ.

For instance, a passenger who buys a ticket for a 60-minute local trip at N25,000 ends up paying N16,250 as fuel surcharge.

The Chairman, Committee on Aeronautical and Passenger Charges, Mr. Ahonsi Unuigbe, confirmed this in a document made available to our correspondent on Wednesday.

He explained that this formed part of the findings of the committee set up last year by the Minister of Aviation, Mr. Osita Chidoka, to look into passenger charges in Nigeria.

Unuigbe said, “With respect to passenger ticket charges, the basis of some of these charges is not known and is quite arbitrary. For example, the committee analysed the basis for the computation of passenger tickets for four domestic airlines namely: Arik, Dana, Medview and First Nation.

“The analysis shows that an amount ranging from 40 per cent to 65 per cent of the airfare is hidden as fuel surcharge, also known as YQ. The computation of this fuel surcharge is unknown to both the passengers and the government alike.

“Equally, this cost element was omitted by the airlines in the computation of both Value Added Tax and Ticket Sales Charge, resulting in significant loss of revenue to the Federal Government.”

According to him, there is also a prevalence of inaccurate computation of statutory charges and non-remittance of the passenger charges collected by airlines to the appropriate aviation authorities.

“From the tickets analysed, some airline operators deliberately charged as high as nine per cent of base fare as Ticket Sales Charge as against the statutory five per cent, which is expected to be remitted to the government through the Nigerian Civil Aviation Authority,” he stated.

As a result, Unuigbe said the committee recommended an investigation into the charges, adding that that would help to alleviate the financial burdens on the passengers who had to pay more as airfares.

“There is, therefore, the need for the undertaking of a full independent audit of the YQ fuel surcharge as charged by airline operators and the introduction of standards as well as sanctions for non-compliance,” he said.

An official of Arik Air, who gave his name as Bode, told our correspondent that it was inevitable that the airlines would transfer the bulk of their expenses, especially on fuel, to the customers.

He said, “This is business and every airline is in this to make profits; you know that the bulk of the expenses of airlines is on fuel, because aviation fuel is very expensive.

“Therefore, it is only normal for this amount to be passed on to the customers, or else, how would the airlines make ends meet and pay staff salaries?”

 

[Punch]