Airlines have continued to increase the price of tickets because they source foreign exchange from the parallel market at N500 per dollar.
From N28, 000 for a one-hour flight after the high season in December 2020, the average cost of an hour ticket is now risen N60, 000 (one-way ticket) and risen as high as N120, for passengers who buy a ticket on the day they are traveling.
The airlines said there are indications that the fares would continue to soar, unless the Central Bank of Nigeria (CBN) provides them forex or creates a special window for aviation.
This is also as operators have pointed out that many aircraft that were taken out of the country overseas were yet to be brought back because of the coronavirus pandemic, which has hindered activities in most countries. As a result, Nigerian carriers have a limited fleet but high demand for air travel, as insecurity continues to discourage many people from traveling by road.
Toyin Olajide, the chief operating officer, Air Peace, said that airfares are high because of forex as airlines buy dollars from the parallel market to source spares, which they use to maintain their aircraft, noting that airlines need dollars for most of their operational expenses.
Olajide stated that the fares could be higher if the airlines wish to reflect the actual cost of operations in their tickets but competition has kept the cost of ticket at the current pricing, which is still lower than the pricing that could make flight operation profitable.
“Airfares are high because of forex. We buy dollars from the parallel market because we cannot source from the CBN. When you look at the prices of tickets, they don’t reflect the actual cost of operation; if they do they will be higher than what we sell tickets now, but competition has kept the fares relatively low.
“We need dollars for most of the things we do in aviation. We buy spares in dollars and we source dollars at N500 per dollar. Just imagine the cost if you want to import an aircraft engine. So the high cost of fares is because of forex,” she said.
The chief operating officer also acknowledged that currently there is limited capacity because airlines are operating less number of aircraft in their fleet, disclosing that Air Peace has most of its aircraft overseas where they were ferried for maintenance but they got stuck because of COVID-19 pandemic lockdown.
She said that most maintenance facilities overseas engage in skeletal operations due to the lockdown, so many aircraft under maintenance have not been completed to return to Nigeria for service.
“Our aircraft that were ferried for maintenance overseas have not returned due to the lockdown. The maintenance facilities cannot meet delivery time. Few people are allowed to work on the aircraft and because of the lockdown so many things are not working the way they should.
“For example, we have some of the aircraft in Israel, if you order spares from another country it takes time before it will be delivered because Immigration services may not be working in some countries, some companies may not even be operating optimally. So these are some of the challenges that we have,” Olajide said.
She also disclosed that about 21 of Air Peace aircraft are under maintenance or due for maintenance and explained that the Nigerian Civil Aviation Authority (NCAA) calculates aircraft maintenance date by calendar months, so anyone that operated for 18 months is grounded and readied for maintenance.
“We have 21 airplanes that are under maintenance or due for maintenance but we have not got slot for those due for maintenance in facilities overseas. They have to push out the ones that have completed their checks before they will take in more. So the aircraft have to queue and wait,” she said.
Olajide, however, said that the good news was that the brand new Air Peace aircraft, Embraer E195-E2 would soon start operation, as NCAA is about to complete its certification on them.
Also speaking on the high cost of airfares, Ado Sanusi, the former CEO of Aero Contractors, said that high demand triggered the increase in airfares and capacity is not growing, adding that dollar is getting scarcer every day; so airlines go to the market where they can buy the dollars at any amount in naira.
“Airlines are also taking advantage of the demand because I cannot understand why economy tickets were selling for N74, 000 from Abuja to Kano, one way, which is less than one hour flight. There is a lot of demand for air travel because of security challenges on the roads; airlines are taking advantage of that,” Sanusi said.
But Mahmoud Abdullahi, the managing director of Aero Contractors, said that high fares are caused by scarcity of foreign exchange so airlines are finding it difficult to access dollars so they buy from the parallel market.
“Airlines are finding it difficult to source dollars. They are buying it from bureau de change. If we are getting it from CBN it will be better. Then there is this issue with aviation fuel, which prices change every day. It keeps going up. For airlines, everything is dominated in dollars. CBN should give airlines a special window to access forex. The fares are increasing but there is a limit to what the passengers can afford,” the Aero Contractors boss said.
Sam Adurogboye, general manager, public affairs, NCAA, said that the maintenance calendar of 18 months for C-check couldn’t be changed because that is what is in the regulation, so it is the law.
He, however, remarked that if the airlines want to review it they should submit a proposal to the regulation committee to consider.
