Less than three months after some domestic airlines raised ticket prices for the South-East and South-South regions in anticipation of the Yuletide, the Managing Director/Chief Executive Officer of Aero Contractors, Capt Ado Sanusi, criticized the move, calling it a flawed business model.

Sanusi acknowledged that airlines typically adjust fares based on the principles of demand and supply but insisted that raising ticket prices during the Christmas season was unfair to travellers.

In a conversation with Vanguard, Sanusi stated, “Airlines have more demand for tickets during the Yuletide, so they feel that they can increase the prices so that the highest bidder can pay for these tickets.” He went on to say, “Personally, I believe that is a wrong business model. I believe that it is wrong to increase prices during the Christmas period. I do understand it is basic Economics 101 because supply and demand is a factor. When supply is low and demand is high, prices go high. When demand is high, supply is constant, prices still go up.”
Sanusi provided an alternative perspective on fare management, asserting, “That is the economics of the whole thing. I believe airlines should have a way of managing the supply and demand through what we call booking in advance, opening fare buckets and properly managing inventory, which is good.”

In August, the publication also reported that Nigeria’s largest airline, Air Peace, had increased its one-way economy ticket fares from Lagos to Asaba in Delta State, as well as to Enugu and Benin in Edo State.

United Nigeria also significantly raised its one-way economy ticket prices simultaneously for routes from Lagos to Enugu, Lagos to Owerri in Imo State, and Asaba in Delta State.

Roland Iyayi, a trustee member of the Airline Operators of Nigeria, had previously defended the fare increases, telling Vanguard that pricing decisions were an economic consideration.

Iyayi explained the dynamics of the market, stating, “We look at it from the standpoint of demand and supply. There is also a need to consider all the factors involved. For the South-East, during a peak period, traffic is typically one way. What it means is that the demand is usually in one direction. If an airline takes maybe 100 passengers to that destination, it comes back with maybe about 20 passengers.”

He concluded his justification by adding, “Now, because the price is in one direction, the price of each seat has to be priced in such a way that the yield from one direction would fairly cover the operating costs. What happens around that period (Yuletide) to scheduled airlines is similar to the structure adopted by charter airlines.”