Prices of air tickets will not be reduced by airline operators despite the appreciation of the naira against the dollar, the Spokesperson of Airline Operators of Nigeria and the Chairman of United Nigeria Airline, Obiora Okonkwo has said.
The AON spokesperson said this on Monday during an interview on Arise TV monitored by THE WHISTLER.
The comment is in reaction to the Riot Act read to the aviation industry by the minister of Aviation and Aerospace development, Festus Keyamo.
Keyamo said airlines would be held responsible for flight delays and also held accountable for their actions.
Okonkwo said the industry is seeing a situation where the government wants to hold somebody responsible for their actions or inactions.
In his comment on the average prices of air tickets which have surged from around N60,000 to nearly N200,000 for economy seats, he said the prices are unlikely to reduce anytime soon.
Okonkwo said that airline operators are the “biggest losers” from the high cost of airline tickets.
He said with the high cost of tickets, operators are “still very considerate. We just have to pray that it will not go higher because we don’t have free funds, and we cannot sustain or bear losses.
“What is important in every flight is the number of passengers that you have on that flight at an average rate. It pays us to have a full flight at a certain affordable price.
“So, we know the higher the prices the fewer the passenger. If I sell an economy ticket for N200,000 and a flight that has about 160 passenger capacity and I carry 20-30 passengers, I am at a huge loss. I will rather want to sell it at N70,000 or N75,000 and carry full passenger, yet there is a cost.”
Airline operators have over the years complained of issues with access to dollars and trapped funds with the Central Bank of Nigeria. They resort to the black-market where they buy forex at a high rate above N1,000/$.
However, the currency fell from around N1,170 to less than N950 over the weekend after the CBN intervened in the market.
Okonkwo said, “The immediate relief that we will give is that you may not see a continuous increase in air ticket rate, but for it to change overnight, we had said over and over again that for all the flights that we have been making since January this year, it is being subsidized by the operators and for the reason that the cost of operation is very high, we don’t have access to cheap funds and any slightest change in all these monetary issues affects us. You can’t be changing prices every day and minute and all that.
“What happened is that we have been praying and hoping that there will be change in the rate of the forex and it wasn’t coming and gradually, there was a progressive change in the cost of tickets.
“We don’t change our tickets like the cost of forex. Buying a ticket is not like buying forex. You have a procedure you have to go through before you can change prices. A typical operator doesn’t make money from the high cost of a ticket.”
He said airlines still have to deal with the cost of aviation fuel which is over N1000 and the high cost of borrowing which is over 25 per cent.
“Aviation we have been saying is critical to this country. There is a single-digit loan for agriculture, there is a single-digit loan for power, there is a single-digit loan for other critical areas and then there is a huge subsidy for land transport.”
