Finance

Why cost of economy flight ticket may hit N100,000 soon


The cost of flying economy class across domestic airlines in Nigeria is expected to hit N100,000 soon.

This is due to the rising operational costs occasioned by aviation fuel price hikes, foreign exchange shortages, among others.

This was disclosed by the Airline Operators of Nigeria (AON), through the Chairman, United Airlines, Professor Obiora Okonkwo on Wednesday.

What domestic operators are saying

Okonkwo said, “Obviously, it is inevitable. I can tell you that all the airline operators, in the last three months, have been losing money, a huge amount of money. There is too much stress on the operational fronts for them to break even.

“Even if the aviation fuel is made available, there must be a review to reflect the minimal operational cost. We are offering patriotic services to the nation and understand the essential part of it. We are part of this economic development process in Nigeria but it is coming at a very huge sacrifice.

“Nothing less than N100,000, between N100,000 and N120,000 base price, even with Jet A1 fuel at N400 – N500. That is what it is. In the industry, it is expected that you will gain some here and lose some here but the biggest challenge indigenous operators are having is that the cost of everything is high. You source money from the commercial bank rates. You source money from the black market. No moratorium for your loans and the banks and AMCON are quick to jump on you.”

The Chief Operating Officer, Ibom Air, Mr. George Uriesi, also explained that the local airlines had reached a point in their operational cost to take a drastic measures.

He said, “Something has to give in. It’s either the prices of fuel that come down or the prices of airfares go up from where they are. So far, the airlines have tried very much to work within the airfares as they are. All sides of the divide are aware that the airlines have done the best that they can do.

“I don’t know what tomorrow holds but at some point, if the airline doesn’t survive, it goes down, to the detriment of everybody-the people who work for the airline, the people who fly on the airline, the country’s economy, everything goes down. So, airlines are just trying to be stable and patriotic. That’s where we are.”

What you should know

  • Oil marketers under the aegis of the Major Oil Marketers Association of Nigeria (MOMAN) have identified solutions to the high price and scarcity of Jet A1 fuel popularly known as aviation fuel, across the country, according to Nairametrics.
  • The major marketers have said that the situation can abate if marketers are able to get foreign exchange at decent rates instead of sourcing from the parallel market.
  • This was made known by the Executive Secretary of MOMAN, Clement Isong, during an interview on Wednesday in Lagos.
  • Isong noted that a drop in the global oil prices and the adjustment of the international supply of crude to meet demand will help the prices come down to more acceptable levels.



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