Despite numerous challenges, domestic airlines in Nigeria seem to be growing. As at last year, there were about 10 to 12 aircraft on wet-lease to fill in the gap of the demands of the system then.
A wet lease is a leasing arrangement whereby one airline (the lessor) provides an aircraft, complete crew, maintenance, and insurance (ACMI) to another airline or other type of business acting as a broker of air travel (the lessee), which pays by hours operated.
Over time, the aviation regulatory agency, that is the Nigerian Civil Aviation Authority (NCAA) has issued a lot of Air Operators’ Certificates (AOC) and more airlines are still in the waiting list.
Notwithstanding the increase in airline operators, there have been low passengers’ traffic in the local airspace, arising from poor passenger patronage. This situation which characterised the early part of 2022, has led to a sharp decrease in airfares as many airlines now, try to load their airplanes.
An assessment of the operations of local operators shows that there is hardly any fully-loaded aircraft while flying from one route to the other.
Last quarter of 2021 witnessed high airfares, with 100 to 150 percent increase in the cost of ticketing.
Although, the last quarter of 2021 was seen as a festive period, cost of fares to most cities, particularly Abuja and Port Harcourt had since crashed. The current prices range between N25,000 and N30,000, depending on the time of booking and purchase.
This was a big departure from last year pricing which was pegged at N40,000 and N45,000, while trips to places like Owerri, Enugu, and Asaba went up to between N50,000 and N60,000.
However, some experts are worried, pointing out that very low fares are pointers to cashflow challenges, insisting that economic audit is necessary to ensure safety of passengers.
But in his reaction, Director General of the Nigerian Civil Aviation Authority (NCAA), Capt Nuhu said that, it is up to the airlines to do its finances and economics and determine a reduction of airfares.
According to the DG, the airlines involved must have done their proper analyses to reduce those airfares, adding that, there are many factors responsible and that only the airlines can explain the reasons behind their slashing of airfares.
Explaining further, Capt Nuhu said “maybe they have excess capacity and instead of leaving that excess capacity to go to waste, they rather make some money out of it. So there are many reasons. Airlines may slash their fares, maybe they want to relate to a particular market segment after which they will adjust their fares accordingly.”
Emphasising that airline finances and economics are interesting subjects, Nuhu opined that “many people are of the opinion that with such reduced fares they might not be able to break even and thus may embark on cutting corners.”
He however, assured that it is the NCAA’s responsibility to ensure the airlines comply with all their standards and regulations, adding that “I don’t think any business will intentionally under-cut themselves to the point that, they will not break even, I mean, let’s understand, this people have invested millions of dollars in their business, to me, it will be fool hardy to shoot yourself in the leg by cutting your airfares to the point that you are no longer profitable or break even. So, it is the airline that can decide and know the internal workings, efficiencies and deficiencies that can really determine and explain the reduction in airfares.”
According to Nuhu, NCAA is alert to the situation and if they see trends or indications of the airlines trying to cut corners, then, the agency will do a full economic audit of the airline to ensure they comply with that.
Stating that NCAA embarks on such audits often as required, Capt Nuhu said “So far, nothing. There are many indications to show an airline has issues.
