Worries As Airfare Surges By 52% Over Forex, Aviation Fuel Price Hike

Concerns have been raised over the continuous surge in the price of average airfare paid by passengers on specified routes for a single journey in Nigeria.

Based on recent findings, the price of airfare has increased by 52 per cent in the past 12 months. The development, Naija News understands is not unconnected with the recent surge in the price of aviation fuel.

Relatively, the poor access to foreign exchange is another contributing factor to the airfare cost across states. It was gathered that presently, energy costs constitute about 50 per cent of an airline’s operating costs in Nigeria.

The National Bureau of Statistics in a new report titled, “Transport Fare Watch (April 2022),” said airfares recorded a 19 per cent increase when gauged on a month-on-month basis.

On state profile analysis, Taraba reportedly recorded the highest air transport charges (for specified routes single journey) in April 2022 with N65,000.00, followed by Kogi with N64,258.91, while Kano recorded the least with N50,000.00.

Analysis by zone also showed that the North-Central recorded the highest airfare in April, 2022 with N57,552.54, followed by the North-East with N56,800.16, while the South-East had the least with N53,402.58.

Earlier in the month of May, the Airline Operators of Nigeria (AON) informed the general public that its stations would be inoperative starting from Monday, May 9.

The operators in a statement sighted by Naija News that its decision was necessary following the unbearable cost of Aviation fuel, which has reached an all-time high of N700 per litre.

According to AON, the recent hike in aviation fuel has shut up operating costs to about 95%. The operators described the development as worrisome, and unsustainable, noting that the airlines can no longer absorb the pressure.

The AON sympathized with the passengers, saying Jet A1 has shot up the cost of operations and that any slight addition in flight tickets will make life even more difficult for its esteemed passengers.

Speaking, however, in an interview with The PUNCH on Monday, an official in the Corporate Affairs Department of the Airline Operators of Nigeria, the umbrella body for local carriers, Mr Ewos Iroro, described the factors behind the increase of airfares as obvious concerns which the operators had clamoured about over the past few months.

According to him, the onus of relieving the sector of the bottlenecks affecting the operations of the airlines is a responsibility the government should take more seriously.

He said, “We know what has been happening in the sector in the last few months. The price of jet fuel has gone up. There are so many factors. All the factors are already out there. Airlines don’t determine most of the factors. Airlines are also operating in a system.”

On his part, the Chief Executive Officer, TopBrass Aviation, Captain Roland Iyayi, also blamed the inability of the government to solve certain fundamental challenges as the reason behind the spike in airfares in the last one year.

According to him, energy costs constitute about 50 per cent of airlines operating cost. This, he said, would invariably give rise to a corresponding hike in airfares.

Iyayi said, “I think the solution is actually in the hands of the government. If for instance, our refineries were working, the cost of fuel would have been lower than what it is today. Fuel, for airlines, constitutes about 50 per cent of their direct operating cost. So, if you take that fuel increase from N150 to about N700; that’s about a 400 per cent increase, but nobody is talking about that. If fuel increased by 400 per cent and airfares increased by 52%, and fuel comprises 50 per cent of the direct operating cost of an airline’s cost of production, then there is something very significantly wrong. I would assume that based on those numbers, airlines may not even be breaking even.”

Also speaking, an economic expert at the Pan-Atlantic University, Associate Professor Emeka Osuji described the hike as inevitable considering recent events in the aviation sector and the attendant economic consequences of these events.

He said, “Aviation fuel has gone up. I don’t blame the airlines. When aviation fuel goes up like it has done, you have to expect an increase. The politicians have taken all the dollars for their political activities. Everything about an aircraft is dollarised, now the dollar has gone up to N600. When that happens you don’t need anybody to tell you what it will give rise to.”

Osuji also said the economy had been badly managed and decried Nigeria’s continued inability to refine fuel for local consumption.

According to him, much of the energy crisis that has led to increased cost of production would have been tackled if the government had been alive to its responsibilities.

This article was originally published on Nigeria News