Hike In Air Fare To N50,000 Will Worsen Nigeria’s Inflation, Says Cowry Assets CEO

The Chief Executive Officer of Cowry Assets Management, Johnson Chukwu, has accused Nigerian airlines of being irresponsible for increasing air fare by almost a 100 per cent.

He said the increase, if not quickly addressed, would worsen the level of inflation in Nigeria.

Nigeria’s inflation rate currently stands at 15.63 per cent according to the National Bureau of Statistics.

Nigeria is faced with rising inflationary pressures particularly as it relates to food prices.

Air travelers on Monday woke up with an unprecedented hike in the price of air tickets to N50,000 from an average price of N29,000 for a one-way trip.

On Friday, February 18, 2022, Ibom Air tickets from Uyo to Abuja was N29,000, but the price for the same trip now costs N50,000 for a one-way trip, THE WHISTLER can confirm.

On February 10, Air Peace ticket from Abuja to Calabar was N29,900, but the price has skyrocketed to N50,000.

For Max Air, Abuja to Port Harcourt cost N31,500 as of 2021, but the same route cost N50,000, according to information on its website.

The development in the industry is coming two weeks after airline operators alerted Nigerians on the surge in price of aviation fuel from N190 to N400 per litre in one year.

By Sunday February 20, the prices jerked to between N420 and N440 per litre without prior notice to the airlines.

The CEO explained that the airlines are taking advantage of the poor state of rail infrastructures and the insecurity situation on the roads.

“People are now forced to go by air which means the airlines have the market power. They are the ones that determine price, because it is now a sellers’ market. We should expect an uptick in inflation,” he said on TV’s Business Nigeria.

THE WHISTLER had last week reported how Air Peace lamented that shortage of aviation fuel was frustrating its flight operations in Nigeria and other African countries.

But Chukwu said, “The increase of about 100 per cent in air freight, I think beyond that fact that the airlines are having additional cost as a result of increase in aviation fuel, but I also think that to pass on 100 per cent increase in air fares is also quite exorbitant.

“The reality is that it is not just fuel that is the operating cost of airlines. So, I do not think that the increase of 100 per cent in fuel cost should lead to a 100 per cent increase in air fares.”

According to Chukwu, there are other operating cost that may have led to the increase which includes foreign exchange (FX) and the depreciation of the naira.

But he said, “The Central Bank has been supporting them. I’m aware that the Central Bank has been supporting the airlines by giving them access to FX.

“So, an increase by 100 per cent in airfares as a result of 100 per cent increase in aviation fuel is exploitative.”