Nigerian airlines have reduced their fares in order to maintain their load factor in the domestic market, checks by THISDAY have revealed. The economy is sliding; many Nigerians who used to travel by air now opt for alternative means of transportation.
For the airlines to retain their customers and remain in business, they must have to reduce fares and this is what most of them have done. Now, a customer can pay N24,000, which, prior to now, was the cost of a one way ticket for a return ticket if he buys early. That is considered very cheap, given that the cost of aviation fuel and overall operation. For the airlines, it would be good to operate at low fares than to fly empty to destinations.
Earlier this year, airlines wanted to peg minimum fare for one hour flight at N18, 000. They considered the high cost of aviation fuel; the unforeseen hiccups at the chain of supply, which made them pay more to get the product and flights cancellation, which make them incur losses. However, individual airlines considered how they would fare under such pricing and those who reasoned it would drive away their customers opted out of the arrangement.
Now, airfares could drop to as low as N12,000 without promo. This, to industry observers is survival mechanism introduced by airline owing to the present hard times of economic morass. Observers are however of the view that airlines may go back to their high, outrageous fares when the economy bounces back.
Competition has also contributed to the low fares. Domestic airlines airlift about eight million passengers per annum. There may be a slide in this figure by end of this year because of the slowing economy. But the number of operating airlines seems to dovetail with the existing passenger traffic; so it is very possible that any airline that hikes its fares would lose its loyal customers.
But a senior official of a major airline, which charges the highest fares in the domestic market, justified it by saying that cost of ticket is directly related to the exchange rate because everything about the aircraft is imported, including aviation fuel.
The official also acknowledged that the high fares have affected the volume of passengers the airline airlifts but insisted the airline cannot sell tickets below the cost of its operation.