..Nigerians pay 3 times higher

...FG must resolve trapped funds to ease business – Agents

...Citizens selling property to ‘Japa’


There is no end in sight to the continued spike in international fares as Nigerian travellers to other parts of the world pay more than three times higher than what their counterparts in neighbouring countries pay on some routes, checks by Daily Trust Saturday have shown.

Our correspondent reports that stakeholders and travellers had decried the high airfares in Nigeria, but little did they know that travellers in neighbouring countries, such as Ghana, Benin Republic, Niger, among other West African neighbours, pay far less on the same class of ticket.

Recently, a social media post went viral about how Lagos to London costs $1,636 (1.3m) and Cotonou to London costs $469 (N380,000) on the same date and airline.

However, checks by Daily Trust Saturday indicate that virtually all the neighbouring countries enjoy far cheaper airfares than Nigeria despite the high travel demand.

Some analysts, however, said the dynamics of demand and supply were at play, coupled with the fact that Nigeria lacks the capacity for reciprocity.

The Lagos-London route remains a reference point because of its busy nature with Nigerians thronging the United Kingdom for businesses, education, and those seeking greener pastures.

A direct flight from Lagos to London is about six hours, 30 minutes.

Turkish Airlines appears to be the most expensive of the tickets, with a Lagos-London flight costing as much as $3,534 (N2.7m) while the lowest advertised fare is $1,432 (N1.1m).

However, the same flight for Cotonou costs between $475 (N368, 837) and $601 (N466, 676).

Also, Accra to London on Turkish Airlines is $701 (544,326) while Niamey, Niger Republic to London costs $918 (N712,827).

Apart from Lagos-London, a check on Lagos-Amsterdam on the same Turkish Airlines put the fare at $1,797 while the same route for Accra is $751.

Checks on British Airways, a United Kingdom (UK) carrier, indicate that the Lagos-London one-way economy ticket costs 2,698pounds or N2.7million at the exchange rate of N957 while Accra-London with a longer flight time costs 2,416pounds or N2.4m or 35,958 GHC.

There was no BA flight from Cotonou for the month of July but only available for Sierra-Leone and Liberia at the ticket cost of 2,866pounds and 3,167 respectively.

For Ethiopian Airlines, the lowest fare for Lagos-London ticket is N941, 930 and the highest being N1,552, 349 at the time of checking.

However, compared to Cotonou, it is higher as the Cotonou-London ticket is as low as N603, 900 for a longer distance of seven hours, 31 minutes.

For Accra-London on Ethiopian Airlines, the ticket goes for N673, 225. It is equally cheaper from Lome, Togo and Monrovia, Liberia.

Another airline checked by our correspondent is Rwand Air, which fixed its fare at N2, 013,037.


Low naira value, biz environment responsible

Stakeholders said the business environment, naira depreciation and the trapped funds were some of the factors that have increased international flight tickets in Nigeria.

More so, they said the principle of demand and supply, worsened by the absence of any Nigerian carrier on the European routes, had worsened the plight of air travellers.

At the time of filing this report, the airline’s rate of exchange was N803 to one dollar from N776, while foreign airlines’ trapped funds in Nigeria hit over $800m.

The president of the National Association of Nigerian Travel Agencies (NANTA), Mrs Susan Akporiaye, said the comparison of Nigeria and neighbouring countries in terms of airfares would be unfair.

She said the economic situation in Nigeria was not the same as Cotonou or Ghana, where there is relative stability in their exchange market.

The NANTA president said airlines were not selling their lower tickets because of the trapped funds. She, however, recalled that before the economic situation deteriorated, the travel agencies made a presentation to the National Assembly five years ago, lamenting over the expensive fares charged by foreign airlines, and called on them to enact a law to make the fares to be at par with what is charged in the neighbouring countries, but nothing was done.

She said, “But doing that comparison now would be unfair because Cotonou does not have the crisis we have in the Nigerian market.

“Presently, the airlines are not selling their low fares and our exchange rate has gone up, so doing that comparison now won’t be fair.

“It has always been like that. Nigeria’s fares are higher than other places, even before this crisis. When everything was normal and our exchange rate was N200, our fares were still higher in the Nigeria market.


NANTA President

“I remember that we took this issue up with our lawmakers over and again but they did not do anything about it.”

She said a fair comparison could only be made when things become normal.

“When things go back to normalcy we can do a proper comparison. Of course, it is a known fact that prices in Nigeria are always higher, and the only explanation airlines in Nigeria give is that it is about the law of supply and demand.

“For us in Nigeria, travelling is a demand; hence the reason the prices in our country cannot be the same as Accra,” she added.


‘Japa:’ Nigerians face hard times

Many Nigerians planning to leave the country to the UK, US or Canada, among other countries, are facing hard times coping with exorbitant tickets.

Sources in the travel industry told our correspondent that while the airlines have released low inventories, which are very few, those low fares have been fully booked for July, August, up to September.

A passenger who travelled to Canada two weeks ago via one of the East African carriers said she paid over N2.7m for her flight.

“I had to sell off my car to raise the money; it wasn’t easy. Although I had an issue, which according to them was responsible for the expensive cost of the ticket, it is still on the high side. They said there was a mix-up on the travel date.”

Toluwani, who got an admission in the UK and she is expected to resume in August, said she might consider going to Cotonou if it is possible because the ticket price is too high in Nigeria.

“I am yet to book my flight, but I am being told I would need about N2m for a flight to the UK. Where will I get that?”

A travel agent who simply identifies herself as Jenny said, “What many people are doing now is to put a distress sale on their properties to be able to raise money for tickets.”

While the exchange rate was given as one of the reasons for the high fares, finding shows that there is no significant exchange rate difference for naira and the CFA.

As at Friday, July 21, 2023, one dollar exchanged at CFA 588.96West African, which equals N791.01, while for Ghana Cedis, one dollar equals 11.67, which translates to N790.74.

Another issue cited is the ease of doing business, which observers say might not be a sufficient ground for the huge difference.

A 2019 ease of doing business score in West Africa, published by statista.com indicated that Ghana led with 59.22 on a scale from 0 to 100, where 100 is the best possible performance in doing business. The country ranked highest, compared to other West African countries. Côte d’Ivoire and Cape Verde followed with scores of 58 and 55.95 respectively. Guinea Bissau achieved 42.85 score points, representing the lowest in comparison to the other West African countries. However, Nigeria scored 52.89; Benin 51.42; Liberia 43.51.


Stakeholders speak

The founding partner/executive director of General Sales and Solution Management Limited (GSSM), an aviation consultancy firm, Babatunde Adeniji, said there was no justification to make the comparison.

He described the ticket differences as “unbalanced comparisons,” asking, “Is the cost of doing business in Cotonou and Nigeria the same?

“It was not rigorous enough and simplistic to reach such a conclusion,” he said, adding that he would not believe the claim of rip-off by foreign airlines.

“Basically, any investment, including business, involves weighing your risk against your rewards. The higher the risk, the higher the reward. Exchange rate risk is a high risk. So they must manage it while trying for higher rewards.”

The secretary-general of the Aviation Roundtable and Safety Initiative, Mr Olumide Ohunayo, said the solution to higher fares was for Nigerian carriers to participate in the market.

Daily Trust Saturday reports that no Nigerian carrier is operating to any European route at the moment, especially the highly lucrative London route.

Last week, the chairman of Air Peace, Mr Allen Onyema, said his move to start a London route was being frustrated by authorities in the UK, adding that his intention was to crash fares as it is a misnomer for a one-way ticket to London to cost over N2m.

But Ohunayo told our correspondent that the Nigerian government should go beyond designating a local carrier to another country, saying it must provide the full complement of diplomatic support through the Ministries of Foreign Affairs, Aviation and Justice.

He said, “The continued increase in tickets on the Nigerian routes is because there is high demand, which is not being met by capacity. That’s why we are having this issue. It is sad that as popular as the London route is, with 21 frequencies only being used to the maximum by British carriers, there is none from Nigerian operators. What’s wrong?

“If the scheduled airlines cannot start the London route, let the chartered airlines be representing Nigerians.

“For any Nigerian airline carrying the Nigerian flags, the Ministries of Foreign Affairs, Justices and Aviation must support the airlines and take all encumbrances away from the airline.

“The moment you ask an airline to go to a country, all the international protocols must be activated to support this airline, it must not be a government-owned airline before you support it. Virgin Atlantic is being supported by the British government on issues that have to do with international trade.

“We saw a belated fight to support Air Peace on the Dubai route after the damage had been done. The demand is here.”

An aviation consultant and airline operator, Captain Ibrahim Mshelia blamed the exorbitant fares in Nigeria on the operating environment.

Mshelia, who is the chairman/chief executive officer of West Links Airline said, “The infrastructure and processes passengers and visiting airlines go through in Nigeria are dilapidated and most unfriendly. The cost of services in Nigeria to visiting airlines and domestic ones, to drop and pick up passengers, is much higher in Nigeria than elsewhere as the government has over-employed people who are often unprofessional and too many that the agencies have to create multiple charges to raise money to meet up with the internally generated revenue. The visiting airlines need to recover their costs, so it is the travellers who pay.

“These are basically the issues. The Nigerian airspace is the most unfriendly and most expensive in the region.”

Also, Group Captain John Ojikutu, the immediate past secretary of the Aviation Roundtable, said given that aviation is traded in dollars, Nigeria should “find the economic way to reduce the value of naira against the dollar as it was in the 1980s and 1990s when it was N40/$.”

“An average airfare was N4,000 or $100. Fuel then was refined locally and not imported at forex costs. So don’t expect airfares to be less, plus the cost of imported fuel for one leg.”

Ojikutu also pointed at what he called security and fuel management, which added to the cost of operation for foreign airlines.

“How many of you know that most EU airlines have secondary security screening for international passengers and hold-baggage? Domestic airlines are complaining of fuel contamination; have you heard such complaint from foreign airlines? If foreign airlines are managing all these on their own, it is at a cost.

“Lastly, what are you doing for the MTN that pays service providers in naira to repatriate their naira earnings in dollars, which you cannot do for foreign airlines that pay for services in dollars to repatriate their earnings?”

(NANTA), Mrs Susan Akporiaye, said the comparison of Nigeria and neighbouring countries in terms of airfares would be unfair.

She said the economic situation in Nigeria was not the same as Cotonou or Ghana, where there is relative stability in their exchange market.

The NANTA president said airlines were not selling their lower tickets because of the trapped funds. She, however, recalled that before the economic situation deteriorated, the travel agencies made a presentation to the National Assembly five years ago, lamenting over the expensive fares charged by foreign airlines, and called on them to enact a law to make the fares to be at par with what is charged in the neighbouring countries, but nothing was done.

She said, “But doing that comparison now would be unfair because Cotonou does not have the crisis we have in the Nigerian market.

“Presently, the airlines are not selling their low fares and our exchange rate has gone up, so doing that comparison now won’t be fair.

“It has always been like that. Nigeria’s fares are higher than other places, even before this crisis. When everything was normal and our exchange rate was N200, our fares were still higher in the Nigeria market.

“I remember that we took this issue up with our lawmakers over and again but they did not do anything about it.”

She said a fair comparison could only be made when things become normal.

“When things go back to normalcy we can do a proper comparison. Of course, it is a known fact that prices in Nigeria are always higher, and the only explanation airlines in Nigeria give is that it is about the law of supply and demand.

“For us in Nigeria, travelling is a demand; hence the reason the prices in our country cannot be the same as Accra,” she added.

‘Japa:’ Nigerians face hard times

Many Nigerians planning to leave the country to the UK, US or Canada, among other countries, are facing hard times coping with exorbitant tickets.

Sources in the travel industry told our correspondent that while the airlines have released low inventories, which are very few, those low fares have been fully booked for July, August, up to September.

A passenger who travelled to Canada two weeks ago via one of the East African carriers said she paid over N2.7m for her flight.

“I had to sell off my car to raise the money; it wasn’t easy. Although I had an issue, which according to them was responsible for the expensive cost of the ticket, it is still on the high side. They said there was a mix-up on the travel date.”

Toluwani, who got an admission in the UK and she is expected to resume in August, said she might consider going to Cotonou if it is possible because the ticket price is too high in Nigeria.

“I am yet to book my flight, but I am being told I would need about N2m for a flight to the UK. Where will I get that?”

A travel agent who simply identifies herself as Jenny said, “What many people are doing now is to put a distress sale on their properties to be able to raise money for tickets.”

While the exchange rate was given as one of the reasons for the high fares, finding shows that there is no significant exchange rate difference for naira and the CFA.

As at Friday, July 21, 2023, one dollar exchanged at CFA 588.96West African, which equals N791.01, while for Ghana Cedis, one dollar equals 11.67, which translates to N790.74.

Another issue cited is the ease of doing business, which observers say might not be a sufficient ground for the huge difference.

A 2019 ease of doing business score in West Africa, published by statista.com indicated that Ghana led with 59.22 on a scale from 0 to 100, where 100 is the best possible performance in doing business. The country ranked highest, compared to other West African countries. Côte d’Ivoire and Cape Verde followed with scores of 58 and 55.95 respectively. Guinea Bissau achieved 42.85 score points, representing the lowest in comparison to the other West African countries. However, Nigeria scored 52.89; Benin 51.42; Liberia 43.51.


Stakeholders speak

The founding partner/executive director of General Sales and Solution Management Limited (GSSM), an aviation consultancy firm, Babatunde Adeniji, said there was no justification to make the comparison.

He described the ticket differences as “unbalanced comparisons,” asking, “Is the cost of doing business in Cotonou and Nigeria the same?

“It was not rigorous enough and simplistic to reach such a conclusion,” he said, adding that he would not believe the claim of rip-off by foreign airlines.

“Basically, any investment, including business, involves weighing your risk against your rewards. The higher the risk, the higher the reward. Exchange rate risk is a high risk. So they must manage it while trying for higher rewards.”

The secretary-general of the Aviation Roundtable and Safety Initiative, Mr Olumide Ohunayo, said the solution to higher fares was for Nigerian carriers to participate in the market.

Daily Trust Saturday reports that no Nigerian carrier is operating to any European route at the moment, especially the highly lucrative London route.

Last week, the chairman of Air Peace, Mr Allen Onyema, said his move to start a London route was being frustrated by authorities in the UK, adding that his intention was to crash fares as it is a misnomer for a one-way ticket to London to cost over N2m.

But Ohunayo told our correspondent that the Nigerian government should go beyond designating a local carrier to another country, saying it must provide the full complement of diplomatic support through the Ministries of Foreign Affairs, Aviation and Justice.

He said, “The continued increase in tickets on the Nigerian routes is because there is high demand, which is not being met by capacity. That’s why we are having this issue. It is sad that as popular as the London route is, with 21 frequencies only being used to the maximum by British carriers, there is none from Nigerian operators. What’s wrong?

“If the scheduled airlines cannot start the London route, let the chartered airlines be representing Nigerians.

“For any Nigerian airline carrying the Nigerian flags, the Ministries of Foreign Affairs, Justices and Aviation must support the airlines and take all encumbrances away from the airline.

“The moment you ask an airline to go to a country, all the international protocols must be activated to support this airline, it must not be a government-owned airline before you support it. Virgin Atlantic is being supported by the British government on issues that have to do with international trade.

“We saw a belated fight to support Air Peace on the Dubai route after the damage had been done. The demand is here.”

An aviation consultant and airline operator, Captain Ibrahim Mshelia blamed the exorbitant fares in Nigeria on the operating environment.

Mshelia, who is the chairman/chief executive officer of West Links Airline said, “The infrastructure and processes passengers and visiting airlines go through in Nigeria are dilapidated and most unfriendly. The cost of services in Nigeria to visiting airlines and domestic ones, to drop and pick up passengers, is much higher in Nigeria than elsewhere as the government has over-employed people who are often unprofessional and too many that the agencies have to create multiple charges to raise money to meet up with the internally generated revenue. The visiting airlines need to recover their costs, so it is the travellers who pay.

“These are basically the issues. The Nigerian airspace is the most unfriendly and most expensive in the region.”

Also, Group Captain John Ojikutu, the immediate past secretary of the Aviation Roundtable, said given that aviation is traded in dollars, Nigeria should “find the economic way to reduce the value of naira against the dollar as it was in the 1980s and 1990s when it was N40/$.”

“An average airfare was N4,000 or $100. Fuel then was refined locally and not imported at forex costs. So don’t expect airfares to be less, plus the cost of imported fuel for one leg.”

Ojikutu also pointed at what he called security and fuel management, which added to the cost of operation for foreign airlines.

“How many of you know that most EU airlines have secondary security screening for international passengers and hold-baggage? Domestic airlines are complaining of fuel contamination; have you heard such complaint from foreign airlines? If foreign airlines are managing all these on their own, it is at a cost.

“Lastly, what are you doing for the MTN that pays service providers in naira to repatriate their naira earnings in dollars, which you cannot do for foreign airlines that pay for services in dollars to repatriate their earnings?”