Airlines Operating in Nigeria to raise fares again, by 30%

Domestic airlines  are planning to raise airfares against the backdrop of the recent increase in aircraft leasing cost, Oyetunji Abioye reports

Indications emerged on Sunday that domestic airlines were planning to raise  airfares following a recent increase in aircraft leasing cost and insurance premiums by  foreign-based operators.

International aircraft lessors  recently classified Nigeria among “high-risk nations” in terms of doing business.

The total cost of leasing an aircraft, like the popular Boeing 737 Classis series used by domestic airlines in Nigeria, has increased by over 60 per cent, rising from the monthly lease rental of $120,000 to $200,000.

Airlines sources, who spoke under condition of anonymity, said the only option left for the operators was to “adjust their airfares to the prevailing costs of operation”  caused by  the upward review of the cost of leasing an aircraft by leasing and insurance companies abroad.  

Although domestic airlines have yet to conclude by how much they are likely to raise their fares, sources close to the airline chiefs said the planned increase might be about 30 per cent.

The development, it was gathered, would raise economy fares for a one-hour flight to between N37,000 and N42,000, from the current average of N28,000 and N33,000 depending on the airline.

The proposed increase, which is still being examined critically by airline operators in view of the recent adverse effect of the Dana Air crash of June 3 on the flying public, is however being slated for implementation  soon, sources close to the development told our correspondent on Sunday.

The development is coming on the heels of a recent increase in domestic airfares by airline operators by 20 per cent, from between N23,000 and N27,000 to between N28,000 and N33,000.

IRS Airlines, for instance, raised its fares from N25,000 to N30,000, while the largest domestic operator raised its fares from N27,000 to N33,000.

Aerocontractors Airlines is, nevertheless, still offering fares that are a bit cheaper for passengers who book and pay online.

http://www.punchng.com/business/financial-punch/airfares-may-increase-as-plane-leasing-cost-rises/