There are compelling indications that global airfares, particularly on Nigerian routes, may experience a significant increase as the International Air Transport Association has set the exchange rate of $1 to N770 on Wednesday.
The protracted inability of international airlines to repatriate their ticket sales for a significant duration has been a contributing factor to the elevated airfares observed on Nigerian routes.
The mean cost of a six-hour economy class flight has increased significantly from approximately N400,000 in 2021 to roughly N1.2 million in both 2022 and 2023.
Similarly, business class tickets have increased from N4 million to N6 million during the same time period, depending on the airline and time of purchasing.
With the new benchmark, a N1.2 million economy ticket may cost N2 million or more, while business class prices could cost N7 million or more.
A source close to one of the foreign airlines operating into Nigeria confided stated on Tuesday that the new regime of N770 to one dollar would kickstart today.
According to the source, IATA had already informed its member airlines of the new benchmark. The source said: “Please, be informed that the IATA Rate of Exchange will increase from tomorrow (today).”
