A report issued by SBM Intelligence blames the devaluation of the naira as the major reason behind the surge in airfare costs in the country. According to the report, transportation costs have skyrocketed, causing discomfort for many citizens who travel. It was revealed that when the fare is converted to naira, the actual cost of flights in dollar terms is cheaper. This difference highlights the impact of currency fluctuations on the cost of travel.... CLICK TO READ THE FULL NEWS HERE▶▶
As of 2017, Nigeria’s exchange rate stood at N395.42 and has since jumped to N1518 in 2024.
It has been discovered that air travel costs have decreased in dollar terms, from $82.82 in 2017 to $82.14 in 2024.
However, the average flight price has more than tripled in naira, jumping from N32,750 in 2017 to N124,693 in 2024.
In naira terms, between 2017 and 2024, Nigeria recorded a growth of 280% in airfare rates, jumping from N32,750 to 124,693.
However, in dollar terms, airfare fell from $82.82 to $82.14 between 2017 and 2024.
The Head of Operations at SBM Intelligence, Stanley Ikechukwu, spoke to SaharaReporters, stating that the devaluation of the naira, among other factors, was responsible for the increase in airfare in naira terms.
“We cannot just look at the recent hike in airfares in isolation because of the devaluation of the Naira.
“The airline business is a very expensive venture and any government policy wrongly articulated can affect the airline industry and other industries as well.
“You will agree with me that before the devaluation of the naira, airline tickets had been gradually but steadily increasing. Before the Bola Tinubu administration, ticket prices rose from N25,000 for a one-way trip to Abuja to about N35,000 and have been on such a steady rise since then.
“By the time Muhammadu Buhari’s administration handed over power, flight tickets were in the range of N70,000 to N80,000 for a one-way trip to Abuja.
“Devaluation of the naira under the Tinubu administration also put a heavy burden on the airline business, which also affected flight tickets. Among other reasons are increases in fuel prices.”
He further explained, “The cost of Jet A1 fuel has risen significantly from N200 to N903 per litre, making it challenging for airlines to operate efficiently. Another big hit is that the airlines have to tie down operating costs in procuring and storing Jet A1 fuel for a longer period of time.
“It’s not a situation where you can just stop at any fueling stations and top up the reserve like road transportation.
“Maintenance costs have their own effects too. Airlines incur substantial expenses for aircraft maintenance, with a single C-check costing between $800,000 and $1 million.”
“There has been a gradual but steady increase in taxes and surcharges by airline operators. Government taxes and levies account for more than 40% of airline earnings in Nigeria, making them one of the highest in the world. “Other factors include demand and supply and how they affect the incomes and purchasing power of Nigerians.”
