Recession: Domestic airlines set to increase fares by 100%

Hard times await passengers this Yuletide as air fares on the domestic routes may rise to N50,000 for a one hour flight.

Information gathered on Thursday indicated that the current economic hardship confronting airline businesses which has made the cost of travel difficult for the domestic carriers, has made it tight for them to continue to charge the current fares they are charging.

According to investigations carried out, those who spoke to the Nigerian Tribune have raised the alarm that any attempt to force the domestic airlines not to increase fares may be an invitation to safety compromise and subsequent air disasters.

One of the managing directors of one of the domestic carriers who spoke to the Nigerian Tribune, on Thursday, confirmed that there was no way airlines would still continue to charge the same rate because a liter of aviation fuel which hitherto was sold for between N145 and N180 has gone up to N250.

The few domestic carriers operating are charging between N20,000 and N25,000 on a one hour flight an amount key players have argued was not economically reasonable in the face of the myriad of challenges confronting them.

Prior to this period, domestic airlines have been grappling with high cost of production caused by various challenges ranging from: expensive aviation fuel, multiple charges, government unfriendly policies, economic recession to the scarcity of forex.

Currently, the domestic airlines are operating under a very bad situation with some of them failing to meet their obligations to the traveling public.

As the crisis continues, key players have agreed that such decisions like hiking of fares are inevitable.

The Managing Director of Centurion Security Services and a one time military commandant of the Murtala Muhammed Airport, Group Captain John Ojikutu (retired) has joined those who have advised the airlines to hike their fares for survival.

According to Ojikutu in a submission he made to the minister of state for aviation, Senator Hadi Sirika, on the way out of the crisis, he suggested that one of the ways through which the domestic airlines could survive is through an upward review of air fare.

“We can no longer operate an hour flight anywhere with less than $100. Moreover, consider different landing and parking charges for international airports from those of others. Even though the Nigerian Civil Aviation Authority (NCAA) has not categorized the airports, let’s have three categories each with different landing and parking charges. Airlines can therefore adjust their routes according to their financial health,” he said.

Speaking to the regulatory body, the NCAA, the spokesperson said since airfare issue had been deregulated, the authority does have power to stop any airline from increasing fares.

He said such decision could only be effected after such an airline must have filed a notice on such move and be able to convince the NCAA on why it should increase fares before it can now announce fare increase.

An airline official who spoke under anonymity, said anybody still expecting the domestic airlines to remain on the old fares up till a month ago is not sincere going by the obvious economic challenges confronting airline business.

According to him, the airlines are presently operating at a loss and can no longer cope with the situation.

“Things are very tight with airlines as the bulk of the business is done in foreign currencies which the naira can not compete with. Under the present situation, for the domestic airlines to maintain standards, pay workers, lift fuel, hiking of fares is very justifiable,” he said.