…says rising airfares not unusual during festive season
…urges government to remove taxes, cut levies to lower fares
Amid widespread passenger complaints over rising domestic airfares, Obiora Okonkwo, Chairman and Chief Executive Officer (CEO) of United Nigeria Airlines, has said Nigeria remains one of the cheapest markets for air travel globally, even as local airlines struggle to remain financially viable.
Okonkwo made the remarks during an interview on Channels Television on Thursday, where he explained that the current spike in ticket prices is largely driven by seasonal demand associated with the festive period and not deliberate fare inflation by airlines.
According to him, increased passenger traffic during holidays is a global phenomenon, noting that similar situations occur in countries with better infrastructure and security.
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He cited the recent Thanksgiving travel rush in the United States, where airports were congested and fares surged despite efficient road and aviation systems.
“This is a special time of the year when there is a spike in the number of people who travel. It has always been like that. Airlines prepare as much as they can with serviceable aircraft and schedules, but pricing becomes a hot topic during this season,” Okonkwo said.
He explained that what often circulates on social media are the highest-priced tickets, which represent only a small fraction of seats on any aircraft.
According to him, airlines operate multiple fare classes within the economy cabin alone, with some passengers paying significantly lower fares than those booking late or opting for premium services.
“In an aircraft where someone pays N400,000, there is also someone who pays N100,000. At the end of the day, when we calculate the average yield per seat, it may come down to about N120,000 or N150,000, including vacant seats,” he said.
Okonkwo stressed that airlines must meet minimum revenue thresholds to break even, service aircraft, meet obligations, and continue operations, adding that high fares are not in the interest of operators.
“We want full aircraft. We want 90 to 95 per cent load factor. That’s when airlines are truly in business,” he noted.
Addressing comparisons with domestic airfares in other African countries, Okonkwo argued that Nigerian air travel is still relatively cheap when converted to dollar terms. He explained that even the highest economy fares in Nigeria amount to less than $200, which is lower than what passengers pay for similar flight durations in many parts of the world.
He, however, lamented the high cost of doing business in Nigeria’s aviation sector, noting that nearly all operational expenses, including aircraft acquisition, spare parts, maintenance, insurance, and training are dollar-denominated, while tickets are sold in naira.
“About 99.5 per cent of our operating expenses are in dollars. Yet we sell tickets in naira. On top of that, airlines in Nigeria take loans at interest rates of 30 to 35 per cent, compared to 2 to 5 per cent in other countries,” he said.
The airline executive also blamed multiple taxes and levies imposed by various aviation agencies, describing Nigeria as one of the most expensive places in the world to operate an airline.
“We collect charges on behalf of everyone in the aviation ecosystem, ground handlers, regulatory agencies, airport authorities and all these costs are passed on to passengers. About 80 per cent of these taxes and levies do not exist in other parts of the world,” he stated.
Okonkwo urged the Federal Government to urgently review and remove multiple charges, cut taxes, and provide access to single-digit interest loans for airlines, stressing that such measures would directly reflect in lower ticket prices.
“We are not asking for free money. We are asking for a fair operating environment. If taxes and levies are reduced and infrastructure improved, ticket prices will come down,” he said.
He warned that the continued high cost of operations could further threaten the survival of local airlines, noting the high mortality rate of Nigerian carriers in recent years.
“When airlines don’t fly, it’s not good for the economy. Aviation is not just about transporting passengers; it is a catalyst for economic growth,” Okonkwo added.
