Airfare hike imminent as domestic airlines battle to stay afloat

Nigeria’s domestic airline operators may push for airfare rise in the months ahead from regulatory authorities as the recent hike in fuel price and multiple levies and taxes to regulators appear to render existing price regime “inappropriate” to meet operating cost.

Since the introduction of online booking of airfares, which ensures passengers get very low airfares and the facelift given to airport infrastructure has made air traveling now appears more attractive for hundreds of passengers on Nigeria’s domestic routes.

Passengers now pay between N11,000 and N13,000 to fly on some domestic routes, and there are even promotional fares by some newly licenced airlines, which allow travellers to fly for as low as N9,000 within the country.

But some observers and analysts, however, feel the crash in airfares targeted at attracting more passengers’ patronage, could harm the health of the airlines if not properly balanced with current challenges, particularly the exorbitant aviation fuel price which now goes for as much as N137,000.

“There is obviously the need for an upward review of the current airfares paid by passengers on domestic routes if some of the domestic airlines are to remain in business in the long term,” a top official of one of the airlines said.

“The domestic industry is battling with a lot of problems, from fuel price increase to various taxes paid to the airport owners, the airspace management authority and to the NCAA. Staff salaries are being owed and routine maintenance of aircraft is becoming a problem to some airlines. But the big issue is that what some airlines are charging now does not constitute appropriate pricing for them to remain profitable as business operators,” an industry source told Daily Sun.

Alhaji Muneer Bankole, Managing Director of MedView Airlines, a local operator, decried the harsh operating environment for domestic carriers, stressing that lowering airfares to attract customers was inimical to the local industry.

Bankole said available data showed that airlines that crashed airfares to gain customers ended up being immersed in far more financial crises to remain profitable with the inability to execute fleet maintenance as one of the greatest problems.

“Most of our colleagues who are selling tickets at N8,000 and N9,000, I want to be honest, they are not making any profit. To do an hour flight, for instance, between Lagos and Abuja will not cost you anything less than N15,000 per passenger taking into consideration the price of fuel and maintenance of the aircraft and the crew,” he said.

“If you fly an aircraft at N8,000 and N9,000 when it is time for you to do maintenance, you will find that aircraft on ground and I don’t want to mention their names,” he added.

In recent months, industry regulator, the Nigerian Civil Aviation Authority (NCAA) while allowing domestic operators to reduce airfares has, however, cautioned against any hike in airfares without getting its approval as it would move to nullify the increase.

Fan Ndubuoke, spokesperson for the NCAA, who reacted to speculations that local airlines may hike fares to meet operational cost said, “it has not authorised any increase in airfare by any airline in the aviation industry. The travelling public should ignore such misleading information,” he added.

 

Source : SunOnline

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