FAAN blames air fare hike on exchange rate, fuel price
…As passengers bemoan 100 % air fare hike by domestic airlines
By Seun Ibiyemi
The Federal Airport Authority (FAAN), has blamed the recent hike in air fare on increased cost of aviation fuel and exchange rate.
Mr. Kunle Akinbode, the Head of Cooperate Communications, Port Harcourt International Airport, stated this in an interview on Monday in Port Harcourt.
According to Akinbode, aviation fuel which sold for about N250 per litre, now sells for more than N400 per litre, adding that the hike also includes prices of spare parts which have drastically increased in recent times.
“FAAN and other regulatory agencies in the aviation industry are conscious of the plight of airport users, especially in respect to increased air fare by the various airlines.
“Currently, aviation fuel is selling for over N400 per litre, all aircraft components/parts required for operations are imported, so this has invariably affected air fare.
On how the new rate is affecting patronage by passengers, Akinbode noted that patronage was considerably good irrespective of the high flight rate.
“Nigerians will still fly irrespective of the cost because speed and security is a major advantage of air transportation over road,” he said.
Also Air passengers have continued to bemoan the recent 100 per cent hike in air fares by domestic airlines in the country.
A cross section of the passengers, who spoke with journalists in separate interviews, decried the hike in the air fares in the past four week.
In Lagos, passengers called on the Federal Competition and Consumer Protection Commission (FCCPC), to intervene to bring down the air fares.
They said that most of the domestic airlines had pegged their minimum fares at N50, 000, from an average of N22, 000.
They urged FCCPC to unravel the reasons for the sudden hike in airfares by all domestic carriers.
A checks at the booking counters of some airlines in Lagos, showed that Lagos-Abuja, one-way economy flight sells for between N62,350 and N92,000, depending on airlines, while return tickets sells for between N115,000 and N170,000.
Flight booked in advance range from N50, 250 to N60, 450 for economy class on one-way.
Lagos-Kano flights also go for between N81, 701 and N98, 000 per seat.
Lagos-Port Harcourt route sells for N50, 950, while advance booking flight goes for N55, 751 per traveller.
The minimum ticket price for a three-week booking on Air Peace, Ibom Air, Max Air, Azman air and others have been pegged at N50,000 flat rate, showing about 115 per cent increase from N23,300 minimum rate.
A passenger, Mr. David Solomon, appealed to the relevant authorities to intervene on the sudden increase in tickets price.
Solomon, who said that the new tariffs would have adverse effects on Nigerians traveling by air as most Nigerians would choose to go by road.
“How can I pay such an amount from Lagos to Benin? How can I pay double of what I used to pay?’’
Another passenger, Mrs. Gladys Stevenson, said that the hike had made majority of Nigerians to resolve to go by road to Abuja on hearing the new fares.
Stevenson said: “I used to secure tickets on United Nigeria Airline to Abuja for just N46, 000.
“I almost took to my heels, as l was asked to pay N86, 500 for the same flight ticket.”
However, some aviation stakeholders have aligned with the ongoing increase, as air tariff had been deregulated for so long.
Retired Group Capt. John Ojikutu, former Commandant of the Lagos Airport and aviation security consultant, reckoned that airlines might be excused on the airfare spike, as they were for once “charging the right fares commensurate with the economic realities.”
“It is not surprising that the airlines have continued to struggle, owing service providers and regulatory agencies’ deductions of five per cent Ticket Sales Charge (TSC) and Passenger Services Charge (PSC), just to stay afloat.”
Dr. Gbenga Olowu, the President, Aviation Safety Round Table Initiative (ASRTI) said that tariff had been deregulated in the last 15 years ago in the sector.
Olowu said that based on this, airlines were free to change their fares, depending on the economic realities.
According to him, today, “If airlines dropped tariff from between 10 and 15 dollars, this will have pressure on cash flow, until tariff per hour is increased beyond 100 dollars that airlines are paying, it will be profitable.
“Air traffic is not mass transit, but for those who are pressed of time to get to their destinations.
“The alternative is to go by rail or road and measure to consequence.”
A stakeholder, Mr. Olumide Ohunayo, also corroborated Oluwo’s position, saying increase in fuel prices and FOREX also posed serious challenge to the sector.
Ohunayo said that the agency had deregulated the airfares and that it could not interfere with the pricing.
“Increase in airfares are often determined by market forces which is what we are all experiencing today,’’ he said.
When contacted, Mr. Sam Adurogboye, the General- Manager, Public Affairs of the Nigeria Civil Aviation Authority (NCAA) said that airfares regime had been deregulated, even before the establishment of NCAA.
Adurogboye said that airfare price was determined by the market forces of demand and supply, which the airlines had applied in their business management.
“What the civil aviation policy said we should check is predatory practice, which means that if all of them decide to be charging N50, 000 as base to any route.
“NCAA only intervenes when an airline fixes ridiculously low airfares.
“That can compromise safety standards as operations of any airline is capital intensive,’’ he said.
