Nigerians are at the mercy of foreign carriers with exploitative fares that have remained for too long. The route is said to produce a high yield. Government is helpless, the country lacks strong indigenous carriers to compete with their foreign counterparts, writes WOLE SHADARE
Ignoring the warning
The International Air Transport Association (IATA) had warned of an impending hike in airfare in countries where airlines’ funds are trapped. IATA’s Vice-President for Africa and Middle-East, Kamil Al-Awadhi had at the IATA Annual General Meeting (AGM) held in Doha, Qatar July last year warned that carriers could be forced to remove lower fare inventories and replaced them with higher fares.
The government did not heed the warning as airlines’ funds piled up to the chagrin of many stakeholders. Nigerian air travelers are witnessing some of the worst fare disparity in the world and the citizens are bearing these huge costs. The least airfare on an economy class cabin to London from Lagos, for example, goes for N900,000.
The fares are outrageous, to say the least. The fares could even rise to N1.5 million ($3, 300) and N2 million ($4, 400) depending on the time of purchase. A return ticket on a trip to London to Lagos on Air France seen by Aviation Metric shows a ridiculous fair of $4, 221.40.
This fare and some others are described as outrageous. It cost even more than a Business Class ticket cost a few months ago while Business Class fare on many six-hour flights to virtually all the international carriers is as high as $10, 000 and $12, 000.
The carriers had in the wake of their $465 million funds trapped in Nigeria introduced high and mindless fares. In the heart of the crisis, some international carriers like Emirates issued a statement to quit Nigeria early this month. Many others were secretly planning their exit or reducing capacity on the route. The pressure from the carriers and the huge implication it was having on the country’s image were enormous. The situation forced the Central Bank of Nigeria (CBN) to quickly release $265 million remaining a balance of $200 million with the promise to release the balance ‘soon.’ It is regrettable that the gesture only emboldened foreign airlines to visit the Nigerian public with the most exploitative response in the name of protecting their businesses.
That piece of good news was supposed to bring good news and ensure that travelers enjoy competitive fares that would be affordable for many travelers without having to spend a fortune to travel for medical treatment, studies, visiting families, loved ones, and business appointments. In summary, the airlines are seriously cashing out on the Nigerian routes, having a field day, and at the mercy of hapless citizens.
Even threats and warnings by the Minister of Aviation, Hadi Sirika, to the carriers of the exploitative fares charged on the route and the selling of tickets in dollars had not deterred the carriers who experts said to carry on as if they are doing the people a favour.
Travel experts confirmed that the airlines over the years have been allowed to carry on with exploitative fares without calling them to order or query the discriminatory fares charged Nigerians amid some of the worse services some of them subject Nigerian travelers to.
The Federal Government has disclosed its intention to probe the carriers engaged in this act. The government was worried over the closure of lower inventories which has led to the astronomical increases in airfare. Speaking when the President of the National Association of Nigeria Travel Agencies (NANTA), Susan Akporiaye, visited the headquarters of the Federal Competition and Consumer Protection Commission (FCCPC), over the high fare, the Executive Vice Chairman and Chief Executive Officer, Babatunde Irukera, said that the commission would study the issues and engage in necessary interventions which may include inviting parties and other stakeholders involved. Irukera, however, commended the association for its trust and confidence in government-structured competition and consumer protection ecosystem. He said: “We at FCCPC welcome your request for guidance and will do our best to help determine possible steps to solve this problem which affects Nigerians, but will first put up an investigation team to determine what led to this impasse and possibly infractions against the travelling public.”
The NANTA President said the visit to the FCCPC was to seek guidance and the next line of action over foreign airlines’ high fares and closing of lower inventories to travel agencies across the country. The NANTA boss decried the foreign airlines’ high-handedness on the matter which had created an uproar among the Nigerian travelling public and also evidently led to the shutdown of many travel trade companies and consequent job losses.
She further noted that her team requested the FCCPC to assist NANTA and Nigeria’s travelling public with remedies that will curb the unfair practices in the downstream aviation sector and how best to articulate its position going forward. Akporiaye, however, disclosed that the association was committed to protecting its members and their businesses from any form of exploitation and unfair practices from any quarter.
Akporiaye noted that airfares have further spiked, with six-hour economy class tickets that erstwhile sold for N300,000 now selling above N1.5 million, adding that the airlines have left only the highest inventories open to bookings in Nigeria. “As usual with them, their response which we could describe as ‘High Fare Pandemic’, is solely targeted at Nigeria and Nigerians, and cannot be seen anywhere in Africa even in countries where they also have their funds being trapped. “It is sad that Nigerians have to buy tickets to the tune of N3 to N4 million and be charged as high as N1 million to change travel dates even on tickets bought before this crisis began.
This is unacceptable, exploitative, and hostile to the survival of the Nigerian aviation downstream sector and to which we call for sanity and return to the best inventory practices and deployment,” Akporiaye said.
She denied that airlines were selling in hard currency, saying, “airlines are still selling in Naira but at the highest rates possible. But the airlines only wanted more engagement that we have not seen from the Federal Government, to assure the business partners and stabilise the situation.”
First Vice President for NANTA, Lagos Zone, Yinka Folami, added that Nigerians were badly hit by the response from the foreign airlines, and are seeking succor from the government. Folami noted that Nigerians paying high premiums would mean that more funds the foreign airlines are getting trapped in the country, with the likelihood of hitting $1 billion by November.
He said: “Despite the issues at stake, Nigeria remains a high net worth destination for the airlines to do business. Clearly, we have a global crisis on our hands and it is not peculiar to Nigeria. But all stakeholders need to come together and show transparency to build trust. That way, there will be concessions here and there. It is not in the interest of the country that we are paying higher to travel. Travel agencies are already closing down and people are losing jobs.”
No matter the reason adduced for the exploitative fares in the name of blocked funds, it is very expedient for the Federal Government through the NCAA to hold an urgent stakeholders’ meeting with all the foreign airlines in Nigeria with a view to finding a lasting solution to the problem