* Why Nigerians pay higher airfares

Chinedu Eze

The Country Manager of British Airways, Kola Olayinka has disclosed that foreign airlines operating in Nigeria lost N6.4billion in the N157.6 billion ($800) of their revenues trapped in the Central Bank of Nigeria (CBN) when the Naira was devalued from N197 to N280 by the apex regulator.

The BA Country Manager explained that the total amount of money trapped in CBN before the devaluation was $800 million and for every $1million the airlines lost N80million.

Olayinka made this known on Wednesday during the Aviation Round Table (ART) Breakfast Meeting in Lagos. He explained that the fares Nigerians pay for international destinations have increased because more naira is exchanged for dollars, but passengers still pay the same fare in dollar denomination.

He said that the economic downturn and scarcity of the dollar are bringing uncertainties in the Nigerian economy and have affected every business done in Nigeria and in the entire economy.

“Dollar scarcity is bringing about uncertainties to all businesses. $800m was in our banks that needed to be transferred. We were selling for N197, when it went up to N285. For every $I million, we lost N80 million,” he said.

Olayinka said the devaluation and the trapping of airlines funds eroded their finances and led to their adjustments in order to survive, while some of the airlines were forced out of the Nigerian market.

“Some of the airlines could not survive. There were a lot of readjustments. BA readjusted by flying Boeing B777, Virgin Atlantic moved to Airbus A330, in a bid to readjust the seat capacity. The fare $1,000 was not changed. The airlines have not increased the fare, the dollar did. Bring 10 more airlines they will fill up with passengers, that is our strength and we should be proud of ourselves as Nigerians.”

But he frowned on the exploitative fares charged Nigerians saying, while Nigeria has high passenger traffic, Nigerians still pay more to travel.

“They need to fill up the aircraft at the right price. We need to compete effectively and friendly. We need to compete in a way that we are not hurting the consumers. It is not in our interest to earn excess monies that sits with the CBN and is going nowhere, what is the point of doing the business? There is multiple unemployment, some agencies and airlines have rationalised. If we sent people away, there will be no job and the multiplier effect, if we start bringing in less people, what will happen to hotels, taxi drivers, and immigration? Government will also be losing monies. All airline operators are task collectors for government,” he stressed.

The BA Country Manager said government collects $20 for every single passenger that passes through the airport security, $50 for every single passenger that passes through the airport.

“Then 5 percent of every fare we collect is a tax and that goes to the government. So everything that affects the airlines equally affects the government. Nigeria is the giant of Africa by location, size, attitude and by who we are. Are we the giant of Africa in our economy and infrastructure? Accra airport is small but effective and functional. On the immigration desk in Accra, there were 50 trained personnel. Are we really the giant of Africa? Go through South Africa Cape Town; I checked in at counter 91 in Cape Town. The question is if we are not living true to our name or our type, what are we doing to get there? What we can be accused of is not talking to the policy makers but we can keep telling them till they get tired of us. No matter how the airport is, BA will fly; we will just walk around it. We have second option for everything. We have been so trained. Have we fully tapped opportunities even within Africa?”

He remarked that Nigeria ought to be the West African operational hub; “We do not need to keep talking about it. We should by location, strength, size and population. We should be the hub for Africa.”