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Naira slump, hiked fuel price push up airfares

By BusinessNews Staff on March 16, 2015

Airfares on domestic routes have gone up by over 60 per cent as a result of the fall in naira value and the fluctuating price of aviation fuel, popularly called Jet-A1.

Our correspondent leant on Friday that most airlines operating one hour flights across the country had adjusted their fares upwards.

For instance, a one-way Flight from Lagos to Abuja that usually attracted between N15,000 and N20,000 had been raised to N25,000 or N35,000, depending on the airline.

Findings showed that Arik Air was charging about N30,000 for a one-way flight, while Aero Contractors charged N25,000.

Some front desk officers at the Nnamdi Azikiwe International Airport, Abuja told our correspondent that airfares were cheaper on Mondays and Tuesdays because of the low traffic on those days.

Although new carriers such as Air Peace charged between N18,000 and N20,000, they often directed passengers to do the transaction online so as to reduce the operating cost for the carrier.

High fares were also charged during rush periods, especially during weekends.

An airline operator and former Secretary-General, Airline Operators of Nigeria, Mr. Mohammed Tukur, said aircraft of many airlines travelled with far less their passengers’ capacity.

He told our correspondent that this had been compounded by the recent crash in the naira.

“The airline operators have even tried. When the naira started falling, they did not increase airfares. But since it has persisted and is now affecting Jet-A1, they have to adjust the fares in order to survive. They have to pay salaries, buy spare parts, pay their dues to agencies of the government and service other costs that keep the business afloat. So, basically it is a survival strategy that the airlines have adopted to stay in business.”

Tukur also stated that the cost of maintaining airplanes was increasing by the day.

He said, “Some airlines flying out of Abuja travel with about 20 passengers onboard and this is as a result of the harsh economy. A lot of people do not have money to fly again. People are cutting down on travels in order to save money and this is because of the economic hardships.”

On how aviation fuel was affecting airfares, Tukur said the product was being imported and marketers had to buy it in foreign currency despite its high cost.

Tukur said, “The oil marketers import aviation fuel and that is a problem. They have to buy dollar at high rate despite interventions by the Central Bank of Nigeria. So, it is a problem.

The President, National Association of Aircraft Pilots and Engineers, Mr. Isaac Balami, told our correspondent that some operators were finding it tough to cope, especially when their aircraft was due for C-Check outside the country.

He explained that it cost about $2m to carry out the C-Check maintenance on aircraft.

Balami said, “We sell tickets in naira in the industry, but when we are paying for maintenance, insurance, expert services and others, it is in dollar. Now if you want to buy dollar, it is at a very high rate. So, this is the reason why airfares have been jerked up by airlines. The C-Check done by airlines cost between $1.5m and $2m and this is paid for in dollars. You now imagine how much naira you will have to change in order to get $2m.”

[Punch]

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