The current upsurge in the prices of air tickets has further increased the growing challenges threatening the operations of airlines in Nigeria.
Both foreign and domestic routes are affected by this trend, which has left air passengers groaning.
In the last six months, the nation witnessed a consistent hike in the prices of air tickets.
Neither the Minister of Aviation and Aerospace Development, Mr Festus Keyamo, nor his spokesman, Tunde Moshood, could be reached yesterday to say what the Federal Government was doing to alleviate the pains of domestic airlines in the country, as their phones rang out when called.
For instance, according to data obtained from the National Bureau of Statistics, NBS, Transport Fare Watch, the costs of air travel surged by 11.01 per cent to N81,334.05 in November 2023, compared to N73,270.27 in November 2022.
Also, the average fare of N70,000 for a one-hour (one-way) flight in early October 2023 increased between N120,500, and N270,000, depending on the airline and time of booking in December 2023.
These steady increases, as witnessed in recent years, have put air transportation beyond the reach of the average Nigerian who now resorts to finding cheaper alternatives.
As the spike generates unease and endless questions among the nation's residents, stakeholders in the aviation sector are also on the edge.
Recently, Acting Director General of NCAA, Captain Chris Najomo, in a video press release posted on the Authority's official X handle, said a high powered committee had been set up to investigate the variances and how these airfares could be brought down.
This came after Airline Operators of Nigeria, AON, called for urgent intervention from the federal government, while lamenting what it described as existential threats to its ease of doing business.
Economic shocks
Worried by the call and persistent surge in airfares, an aviation management consultant, Mr Babatunde Adeniji, told Vanguard that the airline business was heavily dollarised.
Adeniji, who noted that aircraft were imported in dollars, said repairs and maintenance were equally done in dollars.
He said: "The cost of lease has gone up partly because of risks and they charge a risk premium. In terms of services, there are monopolists.
"Suppliers, such as the ground handling companies, the Nigerian aerospace management agencies and some of those critical suppliers all have businesses that are heavily dollarised and are vulnerable to exchange risks."
Adeniji, who stated that recently, the ground handling companies had reviewed their prices upward, explained that the real issue in the airline industry was the fact that it remained a business most vulnerable to economic shocks, adding that every possible change in the economy negatively affects it.
"If inflation rises because travel is discretional, people won't die if they don't fly. Once people's incomes shrink, flying won't be a priority. In the midst of all those increases, the airlines still have to get people who pay naira to fly. Can you see the complications? Their income shrinks because air travel is basically discretionary," Adeniji noted.
The consultant added that the airlines, just like everybody else, followed the law of demand and supply and try to play in that market, noting there was no way an airline would operate in this kind of environment where all the costs have increased and won't be forced to increase fares.
"If they apply all the increases the way they should, nobody will fly. They are in a dire situation. If the new ministry continues to operate the way they are, I don't see any respite because the last statement we got from the Acting Director General of Nigeria Civil Aviation Authority, NCAA, was that plans are in place to bring down the fares without looking at the real causes.
"I have not seen any action of the new minister that would play a part in making things easier for the airlines. Right now, if things continue this way, many airlines will have to close shop. It is the reality," he added.
Shutdown of aviation sector
On his part, a former managing director of the Nigerian Airspace Management Agency, NAMA, Captain Roland Iyayi, who also spoke to Vanguard, explained that airline ticket fares were a function of the input into production.
In his view, airlines have to consider the following: How much does it cost to buy funds? What is the cost of fuel?
Iyayi, who noted that fuel made up 40 per cent of the operating cost of an airline, described it as a very critical element in the cost component.
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According to him, "to be frank, it will be predatory for airlines to sell below their cost of production. They are forced to set their fares at such a level that their costs would be covered.
"What the government can do now is to create an environment where the dollar comes down and the cost of fuel comes down. If those two components can be managed, then fares can come down, otherwise, we are in for a huge shock."
Lamenting the challenges airlines have to go through to sustain operations, Iyayi said sooner or later, most airlines would hemorrhage in terms of burning available cash.
"With that, they might not be able to continue to sustain the operation. If this trend continues, the future for the aviation industry in Nigeria is very bleak. What I see happening is a possibility of some airlines failing.
"Once that happens, it means that there will be reduced capacity in the market, meaning that demand will outstrip supply. When that happens, fares will be much higher than they are currently because the economics of demand and supply is part of the equation," he said.
He urged the government to look at the industry as a catalyst for the economy's growth, adding that to do that, there was need to deepen the penetration of aviation in the country.
