Fresh hike in airfares slows domestic, international traffic

Another hike in airfares has pushed air travel beyond the reach of most Nigerians, be it for business or leisure. The recent rise, especially in the domestic segment, is not unconnected with the depreciation in the value of naira.

Findings show that when the cost and affordability are weighed individually according to their economic circumstances, 45 per cent of Nigerians drop the option of air travel from their plans.

A recent report by the Nigerian Bureau of Statistics (NBS) disclosed that domestic air travellers paid 25 per cent more for flights in July 2024 compared to the same period last year.

Specifically, the average fare for a single journey rose to N98,561.74, up from N78,775.74 in July 2023, according to the NBS in its Transport Fare Watch Report for July.

On the booking counter, depending on the time of patronage, a one-way economy class ticket on Air Peace, Ibom Air, Green Africa, and ValueJet from Lagos to Abuja, ranges between N127,000 and N220,000.

In a country struggling with N70,000 minimum wage, potential air travellers are finding the cost unbearable. For instance, the spike has pushed leisure travel beyond the likes of Emmanuel Ogunseye, who sought to see the advertised awe of Zuma Rock.

Ogunseye, who resides in Lagos said: “It’s a tradition for my family and me to travel every Easter holiday to tourist sites within the country. But for the past two years, we didn’t go anywhere. We had to resort to shopping within our area and just hanging out because flying is too expensive.”

“When I discovered I was to pay close to 2 million naira to visit Zuma Rock, I had to persuade my family (of five children) to change plans.” Data analyst, Blessing Nnaemeka, said that looking at the economy, it’s not feasible to travel frequently by air like in the past. For Nnaemeka, tourism is a way of widening one’s horizons and educating oneself, but it is financially daunting when the cost of airfares is constantly rising and the economy is unfavourable.

“I actually still travel around the world sometimes, but not as before. The last time I went from here to New York, I spent not less than N3 million on air travel alone, just because I wanted to tour Paris, and that’s minus all the expenses incurred on my journey.”

Aviation Management Consultantz, Babatunde Adeniji, explained that one of the drivers of spikes is operational cost, and 10 different components make this up, including aircraft cost, labour and fuel cost. He said that fuel cost alone is the highest of these components and takes up between 35 per cent and 45 per cent of the entire cost.

“In Nigeria, the airlines suffer a triple whammy, as this cost is usually exacerbated by devaluation, lack of local refining capacity (until very recently), and changes in the international price of crude. All the factors underlisted have negatively affected the price of JET A1,” he said.

Adeniji further explained that the most unfortunate consequence is the inability of airlines to increase ticket prices to adequately pass on all of these increases in cost to passengers.

“The passengers push back as they are also affected by a diverse, increasing, and unceasing assault on their purchasing power. The net effect is a decline in air travel driven both from the supply side and the demand side,” the aviation management consultant said.

Chief Executive Officer/Founder of CITA Aviation Fuelling Company Limited, Dr Thomas Ogungbangbe, said that the country should stimulate economic growth by focusing on the right policies, including improving road infrastructure, supporting SMEs, and enhancing sectors like tourism and trade that drive air travel demand.

Ogungbangbe bemoaned the high fuel costs, poor access to foreign exchange, and weakening currency that plagued the aviation sector, thereby making air travel inconvenient for Nigerian citizens. He urged stakeholders to focus on economic activities and strategic investments to revitalise the sector.

“Public-private partnerships to invest in and manage airport infrastructure should be considered. This can bring in expertise, efficiency, and additional funding to improve airport operations and passenger experience.

“Singapore, with a population of 6.03 million, registered 16.5 million passenger movements through Changi Airport in the first three months of 2024. Additionally, Hong Kong, with a population of 7.5 million, recorded a 12-month rolling passenger volume of 44 million. These figures highlight significant potential for passenger traffic when favourable economic conditions align with strategic investments,” Ogungbangbe said.

Vying for collaborative efforts from stakeholders and the government, he said that “a robust economy generates increased business and leisure travel, leading to higher passenger volumes. Therefore, our focus must be on stimulating economic growth and activities that will, in turn, boost demand for air travel.”