Monday, 4 July 2016

Travellers Groan as Int’l Airfares Rise By 70%


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newtelegraphonline.com reports that air travellers from Nigeria are having a horrid time, as airfares on international routes have jumped over the roof, prompting prospective passengers to either postpone their trips or opt for outright cancellation. Two factors – depreciation of local currency against the United States dollars and the rush for summer holiday – have pushed airfares up by between 70 and 100 per cent. A dollar now exchanges for N280.

For long, the naira was pegged at $1 to N197. Airline fares are quoted in US dollars and Nigerians pay the equivalent in naira at the previous exchange rate of N197. After the introduction of the flexible forex policy by the Central Bank of Nigeria (CBN), the payment is now calculated at an exchange rate of N285.
That is 45 per cent increase and the consequence is a huge reduction in travellers, as most people cannot afford the fares. Visa fees have also risen. The United Kingdom six month visa fee has risen to N71,000 from between N38,000 and N41,000.
Also, the US visa fee has jumped from N31,520 in early June to N48,000. Nigerian carriers that ply Lagos-London are not also affordable as they charge relatively the same fares as the foreign airlines. For instance, Arik Air’s flight to London from Lagos ranges between N350,000 and N400,000.
For a return flight from Lagos to New York, fares go between N600,000 and N700,000 on economy class seats with business class tickets going for nearly N2 million. A Medview flight ticket to London Gatwick Airport that cost N285,234 penultimate week has jumped to N398,672 and could be higher in the next few days as air travel is usually on high demand during summer. Emirates and Ethiopian Airways still provide ‘cheaper fares’, compared to many of the other airlines.
New Telegraph investigation shows that the average return ticket on economy class for Lagos-London route has risen to between N553,200 and N600,000 from between N280,000 and N355,000. For business class tickets on legacy carriers like British Airways, Lufthansa, Air France-KLM, the fares are in the range of N2.5 million and above compared to last year which went for between N1.2 million and N1.5 million. For First Class ticket, most of the airlines offered N3.2 million, N3.5 million and N3.8 million per passenger.
United States’ airline, Delta, Economy class return ticket go for between N700, 000 and N800, 000 while Business Class return ticket is between N3 million and N4 million. For a return flight from Lagos to Amsterdam and Lagos to Paris, fares go between N400,000 and above on economy class seats from the initial N260,000, while the business class tickets go for N2.1 million.
A travel agent, who preferred anonymity, lamented that some of his clients going for summer vacation have cancelled their trips due to the high cost of airfare. The source said most of his clients have cancelled their reservations after learning of the astronomical rise in fares.
He said a family of three that wanted to travel to London for summer had to cancel the reservations when he gave them a bill of N1.6 million on economy class on Virgin Atlantic. He stated that travel agents have found themselves in tough situation of reservation cancellations.
“The situation is really affecting travel business. This is capable of making travel agencies go into extinction due to lack of patronage. We might scream; the situation is bad, but we do know that it could have been worse as most airlines were also lamenting before the devaluation.
“The airlines could not get their money out of Nigeria and Nigeria’s debt to International Air Transport Association (IATA) was above $599 million. Some of the airlines started pulling out and eventually stopped coming to Nigeria. First was Iberia Airline, followed by United Airlines.
Emirates Airline stopped one of its flights from coming to Nigeria,” the source said. The Managing Director of Omni-Blu Aviation Services, Akin Olateru, blamed the government for not managing the situation very well, adding that to encourage the country’s carriers to provide alternative to travellers, government needs to exempt airlines from Value Added Tax (VAT). He lamented that it is only in Nigeria’s aviation industry that such taxes are introduced, saying the exercise is killing the carriers.
“Government should provide easy access to foreign exchange to our local airlines. They must devise ways to help. We are the only country that still charges VAT on leisure travel, which makes airfares to be expensive.” He pleaded that government should give the airlines tax holiday, stressing that the $50 international travellers from Nigeria pay that goes to the Federal Airports Authority of Nigeria (FAAN) should be done in naira at an agreed rate.
Managing Director of Flyboku.com, a travel management company, Mr. Abiola Lawal, said travel agencies are groaning. He said the situation is further made difficult because of summer, which he considered as peak of travel. “The airlines do not have reasons to lower fares because demand drives supply.
But another angle to it is that the flights are half full. This is now the opportunity for Nigerian airlines to take full advantage of what is playing out. People are now more a bit flexible in their travel plans instead of the traditional airlines they are used to,” he said.
He said Nigerian carriers and Middle East airlines are taking advantage of the astronomical rise in fares by European and American airlines. He further explained that last year, people got tickets to Dubai for as low as N200,000, saying the situation now is different as destination goes for as high as N400,000.
Culled from New Telegraph