The Association of Foreign Airlines and Representatives in Nigeria AFARN has denied the reports that foreign airlines are lowering fares because Air Peace made its first flight to London.
The President of AFARN, Kingsley Nwokoma, said the reduction in fares between London and other destinations is not a result of competition from Air Peace but, rather due to naira appreciation as well as repatriation of funds that have been trapped, according to Businessday.
Nwokoma said, “Competition is good but before Air Peace came on board, foreign airlines have been speaking to the International Air Transport Association (IATA) and the government about releasing low inventories. This discussion has been going on for a while now.
“A substantial amount of trapped funds have been paid to foreign airlines and that was why foreign airlines released lower fares. The reason why fares went up in the first place was because low inventories were shut down.
“Now the government has shown enough goodwill to make payments, so it is in the interest of airlines to also show some goodwill to Nigerians by making low inventories available. To the best of my knowledge, CBN has cleared all the backlog, the only outstanding payments are the ones with the bank.”
He noted that the value of the naira appreciated as soon as CBN cleared the trapped funds of foreign airlines, and this led to a reduction in airfares.
In addition, He said, “Fortunately all these happened at the same time Air Peace commenced its Lagos-London flight.”
Meanwhile, the President of the National Association of Nigerian Travel Agencies, Susan Akporiaye, said the Nigerian Civil Aviation Authority had threatened to sanction foreign airlines that did not release a low inventory of tickets shortly before Air Peace started its flights to London.
Akporiaye explained that only the largest stocks of tickets were sold by airlines, which led to high ticket prices.
She asserts “When the exchange rate was as high as N1,850 to a dollar, ticket inventory available on the Lagos-London route was between N5 million to N6 million. The NCAA had to engage the airlines to reduce fares because these prices were out of reach for many Nigerians. Some airlines released low inventories 48 hours after the NCAA asked them to, while others pleaded that they be given one week and some two weeks to release low inventories.
“However, whatever the rate of exchange is, is what you see in naira. The rate of exchange determines the price of tickets. Now the rate of exchange has dropped, BA and Virgin Atlantic are charging as low as N1.1 million and N1.2 million for a return ticket from Lagos to London. As the naira gains more strength, fares will continue to drop. Air Peace will also have to further reduce fares, if not, they will not be able to compete on the route.”
Recall, As the Central Bank of Nigeria completes the payment of about $7 billion of the backlog, including over $700 million of unremitted revenue tickets, foreign airlines operating in Nigeria began to relax their low-priced fares on Nigerian routes.
