How Rise In Dollar Rate Increased Airline Tickets Across Nigeria

Since the Aviation industry resumed operation in August after about four months shutdown, air passengers have been complaining of rising domestic flight tickets, which has almost doubled than the pre-COVID-19 price.

AllNews understands that the reason behind rising airfares is a strengthened dollar, which has increased the cost of operation of airlines operating in Nigeria. Rising dollar rate is increasing the financial burden of domestic airline companies.

Airlines Placing Rising Cost Of Operation On Passengers

Domestic airline operators like Air Peace, Max Air, Overland Airways and more are struggling with the cost of maintaining their aircrafts due to rising dollar, and in order to reduce the cost, the companies are sharing the financial burden with air passengers.

Already, COVID-19 pandemic has drastically reduced the revenue of airlines, as they were not operational for four months. Upon resumption, the dollar had rise, increasing the cost of maintenance for airlines.

Straining Passengers For Quick Gains Is Aviation's Plan

Speaking about the increased flight tickets, Max Air station manager, Kehinde Ogunyale, said, “We need to catch up with the economy. That is why we increase the fare. If not, we may be left behind and will not be able to fund operations anymore," he told The Cable.

While disclosing the current price range for flight tickets, Kehinde said, “The fare actually went up. From Abuja to Lagos last week, the highest fare was N35,300 (economy class) and N80,000 (business class). From Abuja to Lagos at present, the highest fare is N60,000 (economy class) and N98,000 (business class).”

NCAA Has No Grievance Against Draining Passengers For Gain

The Nigerian Civil Aviation Authority (NCAA) confirmed that the rising dollar had encouraged the increased airfares. According to NCAA director-general, Musa Nuhu, said the high coat of tickets is one of the consequences of the COVID-19 pandemic.

“As regards ticket prices, yes ticket prices have gone up astronomically over the last week or so. That is one of the consequences of the COVID-19 pandemic,” he said during the presidential taskforce (PTF) on COVID-19 briefing in Abuja on Thursday.

“The aviation, tourism and travel industry is one of the most devastating industries by COVID-19. Because, we had a short down for several months, the airlines were not making money and there are fixed cost that they have to deal with, they have to maintain the aircraft and unfortunately most of these aircraft are maintained outside the country.

“Two issues we have had, because of the short down they don’t even have slots to take their aircraft out and the dollar rate has gone up and they need to raise enough money.

“So the problem basically is that of supply and demand. The supply for airline seats internationally have significantly gone down while the demand domestically since we opened have gone up. So it’s simple basic economics 101, when the demand exceeds supply, the prices go up.”