Stakeholders have predicted that airfares for domestic travel would remain high because of operators’ rising operating costs.
They pointed out that different economic factors, e.g. rising fuel costs and operating expenses, are being faced by air carriers.
The General Secretary of Aviation Roundtable, Olumide Ohunayo, said although there’s been a decrease in air traffic over the past few days, airlines have not lowered their prices, according to The Punch.
He pointed out that prices were determined on the basis of market dynamics, which was affected by factors like inflation, naira to dollar exchange rates and operating costs.
He said, “There has been a decline in the number of passengers, but this has not prompted airlines to reduce air ticket prices. With the devaluation of the naira and other cost components, along with inflationary trends, it is very difficult for the airlines.
“What they will do is cut down their frequencies until the market booms again. People would rather ship cargo or send money than travel due to the cost. Corporate travel has decreased, while most operators are declaring losses.”
In November, the cost of air travel increased by 11.01 % compared to the same period in preceding year, according to National Bureau of Statistics data.
The former President of the National Association of Aircraft Pilots and Engineers, Sheri Kyari, in February warned that aviation fuel prices would remain high as long as the product was imported due to the exchange rate.
In Lagos, aviation fuel is currently selling at over N1,200 per litre, compared to N250 in the same period last year.
According to Phillips Consulting Limited report, the aviation sector is estimated to have incurred an operating cost of US$192 billion in 2022.
The Chief Executive Officer of Centurion Security Limited, Captain John Ojikutu, explained that about 60% of the airline’s operating costs were due to aviation fuels.
Ojikutu noted that with the current price of aviation fuel, air tickets for local travel would cost as much as N140,000.
In order to mitigate the impact of its scarcity on operators and passengers, he recommended that aviation fuel should be produced locally again.
