New Telegraph

Fewer operating aircraft amid growth cause of air fare hike –Cpt. Sanusi

A recent report that airlines have increased fares by over 100 per cent may not actually be true. What passengers are experiencing now in terms of adjustment in fares is as a result of huge demand outstripping supply occasioned by the Christmas season. This was the position of the airlines and stakeholders attributing high cost of air ticket to the Yuletide season and not necessarily raising costs arbitrarily.

The devastating effects of COVID-19 pandemic could be counter-productive for airlines as many Nigerians are unable to fly as a result of harsh economic situation. However, the carriers adjusted fares between 30 and 40 per cent depending on the time of purchase of the ticket.

An airline operator who preferred anonymity said it was not as if airlines deliberately adjusted fares. He said many carriers had cut capacity by over 50 per cent of their pre-COVID- 19 operations with many of them having their planes stuck overseas because of lack of foreign exchange to bring them back to service.

Capacity cut meant that the carriers reduce their workforce with many furloughing workers while others have clandestinely asked workers to go home. The airlines have discovered that furloughing workers alone isn’t the solution at the moment to solve the crisis.

The carriers were already grappling with high cost of operations, difficulty accessing foreign exchange and tough operating environment before COVID-19 set in early this year. Observers opined that even if all the aircraft come back from maintenance the likelihood that over 20 airplanes could be deployed on all the routes it hitherto operated before COVID-19 pandemic owing to drastic reduction in passenger traffic.

The Managing Director of Aero Contractors, Capt. Ado Sanusi, told Saturday Telegraph that his prediction at the end of last year was coming true that the number of operating aircraft would shrink while passenger growth would increase.

He further stated that the number of aircraft flying in the country is reducing while the number of passengers is increasing describing the purported rise in fares as normal principle of economics of demand and supply.

He said: “The airlines have seen that the seats they put in the market are gone within an hour. This practice of closing the lower bucket is done everywhere in the world. It is called revenue management. “If you see that your seats are selling fast, you close and go to the next one and if that one is selling fast too you close and go to the next one. By the time you have two or three seats remaining, it is the highest bidder that will take it.

“What you do is put that ticket at N80, 000, N90,000 and N100, 000 and the highest bidder or someone who is desperate to travel takes it. It is not good for the consumer but the airlines are maximizing revenue. “What happens and the disadvantage is that we are now scaring the flying public because of the cost.

We might shrink; stimulate the market to grow more passengers. “When you reduce the price and say you want to start selling your ticket at N18, 000, what you are doing is stimulating the market so that you can have growth so that people that naturally would go by road can say if they have a little money they can enjoy the speed and safety of air travel.” “If the airlines continue to sell the tickets at those exorbitant prices, the growth will probably stop and probably we will see a decline. That is the disadvantage.

“There are so many factors that contribute to this increase in fare apart from the demand and supply, the shrinking of the number of aircraft flying in the Nigerian airspace. The economy of a country plays a significant role. “We are in recession; the dollar is scarce and really biting for all of the things that we buy which are dollars. Everything has risen in the country. “It is all a combination of it and of course it is end of the year where travelling is at the peak in the country. I predicted this in the beginning of the year and I said so that if the trend continues, we will be selling tickets at N100, 000 and it is happening,”he added.

Sanusi did not see the trend stopping in 2021, stressing that it would continue like thatnuntil new entrants who are at the verge of starting operations and merger would stem the trend. “I believe that there would be some new entrants and there would be some mergers and probably we will stabilise with the vaccines that are coming.

“The stabilisation will come a little faster than you think. But the effect of COVID- 19 will be here like for five or 10 years but we will see probably some mergers and some entrants into the market.” He assured that the prices would definitely go down in February and March because of low demand for air travel at that period but warned that the prices will still reflect the dollar-naira conversion rate which would still lead to an increase. But spokesman for the Nigerian Civil Aviation Authority (NCAA), Sam Adurogboye, said the aviation regulatory body had no say in the astronomical air fares because of the deregulation of the airline market.

Read Previous

Pensioners demand approval of national minimum pension

Read Next

MOUAU: VC selection process descends into crisis

Leave a Reply

Your email address will not be published. Required fields are marked *