The decision of foreign airlines to hike airfares at a time the Nigerian economy is undergoing major difficulties is a source of concern to many intending passengers and travel agencies.
Industry observers argue that the fare hikes are ill-timed, given that fewer Nigerians are travelling at this time of economic crunch.
In fact, a travel agent who spoke to THISDAY on Wednesday, confirmed that British Airways Business Class ticket, from Lagos to London route, advertised on the airline’s website for May 10 to 18 was N2,180, 568, representing about 40 per cent increase.
Although there is reduction in passenger traffic, Nigerians are still travelling and are still paying the highest fares from West and Central Africa to international destinations.
The CEO of Zigona Travel, Ngozi Ngoka told THISDAY that she could not explain why the airlines decided to hike fares at these hard times but acknowledged that the fares are higher compared to last year.
“I do not know the reasons for airline’s decisions but the fact is that I have noticed that the fares they offer the Nigerian public and travel agents for sale are stupendously high. You may need to find out the reasons directly from the airlines. Yes, fares have gone quite high. The airlines are in a better position to tell us their reasons.
Aviation industry sources told THISDAY that the airlines might not have increases fares, but they have removed bucket fixed fares or promotional fares, which tend to reduce how much a passenger pays for a return ticket if he books early. They noted that all the fares, stripped of any incentive have become very exorbitant; from economy to first class seats.
A source attributed the increase to airlines’ huge revenue that was trapped in the Central Bank of Nigeria (CBN), arguing that if their revenues would be delayed they want to make sure that they do not lose the value of their fares.
“All the foreign airlines have now decided to give passengers in Nigeria full value tickets. It is the similar value of tickets you will get if you go to the counter at the Heathrow or any of the airports to buy ticket. So they have moved that full value tickets to online in Nigeria.
“Airlines still have over $600 million with the CBN and they cannot repatriate the money. When they go there CBN will give them 10 percent of what they have and the airlines need cash which they use to buy fuel, pay for lease, catering and so on. You can only benefit from the promotional fares if you are using dollar denominated cards, which means they are getting their money directly. So these monies they are getting in piecemeal and if they devalue the Naira now, the airlines will lose substantial part of their money trapped with CBN’, the source said.
Reacting to the high fares, the National Association of Nigeria Travel Agencies (NANTA) has condemned the attitude of international airlines to charge higher fares in Nigeria when compared to other countries in Africa and queried the rationale for the huge disparity in fares between what the airlines offer to the Nigerian market and what they offer elsewhere in the world.
“The disparity in fares is alarming and we wonder why Nigeria should be singled out for this rip-off. We see no reason why a flight ticket from Accra, Ghana to Europe or USA on some airlines would be cheaper than from Lagos to the same destinations on the same airline. For instance, a first class ticket to Las Vegas from Lagos is N1.8 million more than a first class ticket to the same destination from Accra! Nigerian travellers are now developing Ghanaian economy. These travel agencies are making huge sales from the Nigerian travellers while most of our Nigerian agencies are folding up,” the statement said.
NANTA said before the current monetary policy in Nigeria, there was an increased influx of foreign airlines into the Nigerian market, noting that ordinarily, this should depict great revenue potential for Nigerian travel agents, but this however was not the case.
Many of the foreign airlines contacted did not explain to THISDAY why they have suddenly increased fares or removed some class tickets, which in the past they used to fill their aircraft and now sell tickets at full value.
Investigations revealed that although there is competition in the foreign travel market, the Nigerian market is underserved and that explains why the fares are high. Again, because Nigerians still travel despite the tough economic situation, most of the foreign carriers that have been operating for long in the country understand the market and its dynamics and know that high fares may not discourage air travel.
The Marketing Manager, East and West Africa, Delta Air Lines, Bobby Bryan said the Nigerian international travel market is resilient and shows enduring growth as airlines record good load factor even at low seasons.
Bryan noted that Nigerians have resilient spirit and no matter the challenges they do not give up; rather, they continue to strive to succeed and that explains why passenger traffic rebounds quickly whenever there is a downturn, adding that Nigerians travel a lot.
“Africa is the future and Nigeria is the future of Africa. For me, even when there are challenges here, and we had seen more difficult times, whatever they may be, the Nigerian market always shows resilience. People want to fly here; they are doing business, they are going to school, they are trading; they are travelling for fun and to see their family members. Even at the challenging times, the demand for travel in Nigeria is always strong.
“In some other countries demand goes up; demand goes down but in Nigeria there is always demand. Of course people have had time with the forex right now. You find it a bit of challenge but Nigeria as a market always find a way to bounce back and we know and that is why we say we are not going anywhere, we are here to stay because we know the market always comes back,” Bryan said.
Many industry observers said that to cut down the high fares, Nigeria should empower local airlines to operate international destinations, “because at its prime, Nigeria Airways knocked some international carriers out of the Nigerian market.