(Sundiata Post) – International airlines and travel agencies operating in Nigeria have increased air ticket prices to locations such as Europe, the United States of America and the Middle East, by an average of 18percent in the past five weeks, as summer gradually ends for the year.
BusinessDay’s checks show that airline tickets increased by 6 per cent after the adjustment of the reference dollar exchange rate to N325 on August 1 against N315 to N320 inter-bank rate. Today, after further adjustment of exchange rate to N359 to a dollar, the prices of tickets spiked by over 18 per cent from what they were five weeks ago.
The International Air Transport Association (IATA) in Montreal Canada, announced on August 30th, that from September 1, its exchange rate for ticket sales which stood at N327.7 to a naira, would increase to N359.40.
As a result, travel agencies and airlines advised travellers to purchase their tickets before September 1st to guide against high ticket cost.
“Expectedly, the exchange rates fluctuations affect the prices of tickets, as airlines sell tickets in naira and repatriate their monies in dollars,” said Tayo Ojuri, an industry expert and Chief Executive Officer, Aglo Limited, an aviation support service.
BusinessDay’s checks show that Emirates Airlines return economy class ticket on the Lagos-London route, which previously cost below N400,000 a few weeks ago, when the inter-bank rate was between N315 and N325 to a dollar, now costs N510,000, an average of 18 per cent increase.
A travel agent who craved anonymity, told BusinessDay that British Airways deliberately removed their lower class of tickets on the Lagos-London route, so it can sell the highest economy rate, which now goes for almost N1.5million, against N900,000 few weeks back, representing a 66.67 per cent increase.
The famous Lagos-Dubai route return economy ticket, which cost N300,000 or less, a few weeks ago, now costs N440,000 or more, representing a 46.67 per cent increase.
A British Airways return economy class ticket on the Lagos-New York route, which previously cost below N950,000 when the inter-bank rate was between N315 and N325 to a dollar, now costs N1.77million, representing an 86 per cent increase.
However, the load factors for these locations are still increasing, as a result of the summer holidays and students who are returning to school but travel agencies project that that load factor will fall after summer.
Juliana Johnson, Manager Misha Travel Limited, told BusinessDay that airlines increased ticket prices immediately after IATA announced its exchange rate for ticket sales.
“Passengers who returned for summer holidays as well as students going back to school abroad, have no choice but pay through their noses to travel. However, this may not be the case after summer. The load factor will definitely drop because most people cannot likely afford to pay this much to travel,” Johnson added.
“The demand to travel to destinations such London, the United States and Dubai, are still increasing considerably, compared to last year, when people had to opt to shift their travel locations to African countries, while others had to postpone their trips, pending an improvement in the situation,” Nilesh Thakkar, Chief Commercial Officer, Satguru Travels, told BuinessDay.
Comparing passenger traffic in May 2016 and 2017, which is when most bookings for summer are confirmed, the Federal Aviation Authority of Nigeria (FAAN) recorded stability and growth in the volume of passengers. While about 223,531 passengers travelled for outbound destinations in May 2016, 243,994 went for same purpose in May 2017.
Top among the destinations booked for this summer, include; London, Paris, Dubai, New York, Atlanta, the Caribbean Islands, and Trinidad and Tobago, while African destinations such as the Seychelles and Mauritius are beginning to gain market share from the Nigerian holiday maker.
Kola Olayinka, country manager, British Airways, attributed the development to the fact that the FX situation in the country is now stable, compared to this time last year, when foreign airlines could not repatriate their funds and some airlines left.
“People still travel reasonably and there is need for it. Some people travel for leisure, some for business, and others for studies. The flights are doing very well”, Olayinka said.
British Airways will introduce a bigger and better Boeing 747s on its London-Lagos route from September, authorities of the airline disclosed. (BusinessDay)