The Airline Operators of Nigeria (AON), have announced that the rising operational costs that are being experienced as a result of the aviation fuel price hikes coupled with the foreign exchange shortages may cause the price of base economy flight tickets to rise to about N100,000.
The spokesperson for the local airlines, Professor Obiora Okonkwo, disclosed this during an interview with newsmen on Wednesday, May 18 2022.
He said during the interview, “Obviously, it is inevitable. I can tell you that all the airline operators, in the last three months, have been losing money, a huge amount of money. There is too much stress on the operational fronts for them to break even. Even if the aviation fuel is made available, there must be a review to reflect the minimal operational cost. We are offering patriotic services to the nation and understand the essential part of it. We are part of this economic development process in Nigeria but it is coming at a very huge sacrifice.”
Okonkwo said that the operators having to source foreign exchange from the parallel markets due to a shortage of supply from the country’s apex bank is contributing to the soaring operational costs in the industry.
“In the industry, it is expected that you will gain some here and lose some here but the biggest challenge indigenous operators are having is that the cost of everything is high. You source money from the commercial bank rates. You source money from the black market. No moratorium for your loans and the banks and AMCON are quick to jump on you.” he said.
Domestic flight prices in Economy class in the country only just doubled to ₦50,000 naira in March 2022, when AON announced that the aviation price hike had begun to hit the operators’ profit margins. Another increase could lead to a huge reduction in air traffic in the country, a view shared by a former Managing Director of Associated Airlines, Mr Alex Nwuba.
