Amid skyrocketing aviation fuel also known as Jet A1, forex scarcity and naira devaluation, air travelers are currently in a fix as tickets continue to be on the rise.
The skyrocketing airfare has, however, reduced travel demand and affect the profit margin of local airline operators especially during the yuletide period where travelling is on the increase.
NATIONAL ECONOMY recalls that the yuletide is often the highest peak period for airline operators but crisis in the aviation sector has dampened the expected flight traffic.
The aviation fuel crisis, it was gathered , has worsened and is threatening the ability of airlines to continue operations with the price of JetA1 rising from N200 in December 2021 to over N400 per litre in February 2022 and currently, the skyrocketed to over N800 per litre depending on the area of purchase.
Airlines are also struggling with high operating costs such as taxes, surcharges and maintenance costs that have risen because of the scarcity of foreign exchange. Airlines carry out most of their activities in US dollars which today is in short supply.
Findings showed that aviation fuel accounts for over 65 percent of airline’s revenues, excluding multiple charges to aviation agencies, labour, aircraft maintenance and rent, non-aircraft rents and professional services, landing fees, amongst others.
Due to these mentioned crisis, Airline Operators of Nigeria (AON), in February pegged one-way ticket fare to a minimum of N50,000.
However, since then, one-way airfare has been soaring going above N100,000 especially as the nation approached yuletide period where traveling is always at the peak.
A visit to website of some airlines showed that a one way ticket has hit a whooping N150,000 on high traffic routes.
According to Air Peace, Lagos to Anambra on 23rd of December goes for N150,000.
Abuja to Lagos that was pegged at N50,000 and expected to experience low traffic goes for minimum of N70,000 and may still go up if demand increases.
Lagos to Maiduguri, N95,000, while Kano and Kaduna on Azman Air goes for N70,000, while other low traffic routes also have N70,000.
On Ibom Air, one way ticket from Lagos -Enugu, Lagos- Uyo cost N96,000 and it’s likely to cost more due to demand.
Speaking exclusively to NATIONAL ECONOMY, the chief executive officer, Centurion Aviation Security and Safety Consult, Capt. John Ojikutu (rtd), said as long as naira rates against the dollar and price of Jet- A-1 keep soaring, the air ticket will be high.
He, however, predicted fall in travelling, but said airlines’ earnings will have no significant drop if the fares are reasonably and appropriately increased.
“For as long as the naira rate against the dollar goes up and we are still importing Jet-A1, it is very unlikely that the local tickets fares would go down. When we were refining fuel locally, the dollar rate of ticket fares for average flight of an hour was $100, but it is higher today because we are importing fuel and fuel is being sold more than three times the cost of local refining.
“There were several interventions in the past for the domestic airlines, but now that government too is going borrowing, any help for less than 5million Nigerian air travellers over the remaining 200million Nigerians would not make any economic sense but a disaster on all.
“The passengers travelling figures may drop but the earnings will have no significant drop if the fares are reasonably and appropriately increased. Sure, the fares must be increased to keep the airlines in business and sustain their operations,”he said.
Also, the president, Aircraft Owners and Pilots Association of Nigeria (AOPAN), Alexander Nwuba, had said the ticket price increases due to increase in the demand for flight seats.
Nwuba had disclosed in an earlier chat with NATIONAL ECONOMY, that selling tickets cheaply in December will amount to loss of revenue to airlines.
He said, “The cause of the increase in ticket price should be obvious because everything is priced in dollars that reflects the expected value of money later in the year.
“Also, during the end of the year, there is high demand for airplanes’ seats and airplanes’ seats are considered a perishable item just like hotel rooms that once the night passes, the value is lost. Tickets sold cheaply in December are a loss of revenue to the airline that makes most of its money during peak season.”
