The preference for premium class seats by a lot of air travellers and the inability of the government to regulate the fares of foreign airlines means that passengers on Nigerian routes pay about 23 per cent more than travellers from other parts of the world, OYETUNJI ABIOYE writes.
Passengers on Nigerian routes pay about 23 per cent more on tickets for first class and business class seats than their counterparts in most parts of the world, investigation by our correspondent has revealed.
According to findings, there is a great disparity between the dollar per mile rate that foreign airlines charge premium passengers (first and business classes) on the Nigerian routes and most other international routes.
An analysis of some fares confirms that most of the airlines’ premium fares are about 23 per cent higher in Nigeria than most other global routes with similar flight time, mileage or distances.
A comparative analysis of some first and business class fares shows that Nigerians pay more on most routes.
For instance, a first class return ticket on the Lagos-Dubai route costs $4,695.5 on Emirates Airlines, while the Dubai-Johannesburg with almost the same mileage costs just $3,512. This shows that first class passengers on the Nigerian route pay about 33.5 per cent more.
According to data obtained from an airline global distribution company, the dollar per mile that the airline charges on the Lagos-Dubai route for first class passengers is $1.28, while it charges $0.89 on the Lagos-Johannesburg route.
Similarly, business class passengers pay 23.8 per cent more on the Lagos-Dubai route than their counterparts on the Dubai-Johannesburg route, according to the data.
Also, an average business class fare on the Lagos-Atlanta route, which costs $5,874 on Delta Airlines, is about 32.1 per cent higher than that of the Atlanta-Bombay route, which goes for $3,689.9 on the same carrier.
According to the GDS data, Delta charges its first class passengers $1.01 per mile on the Lagos-Atlanta route and $0.43 per mile on the Atlanta-Bombay route.
The data also shows that first class passengers are charged $1.41 per mile on the Lagos-Atlanta route, while their counterparts on the Atlanta-Bombay route pay $0.97.
The statistics also show that AirFrance charges its first class passengers on the Lagos-Paris route of 2919 miles about $8,984. Passengers pay $3.08 per mile.
However, first class passengers on the Paris-Bombay route with 4,349 miles pay $8,739, and are charged $2.0 per mile.
An aviation expert and airline economist, Mr. Gbenga Olowo, who confirmed this, linked the high fares on the Nigerian route to demand and psychological factors.
He said Nigerians’ penchant for travelling in first and business class cabins might have contributed significantly to the disparity in fares.
Olowo, who is also the President/Chief Executive Officer, Sabre Network, West Africa, a United States-based airline Global Distribution System, said “Empirical regular tariff data to different geographical zones show that demand and psychological factors do largely affect tariff fixing in different markets.
“In market economies, especially aviation, tariffs are not regulated as they are derived from so many factors: demand factors, psychological factors, mark up factors, antitrust competition rules, etc.
“Any profit-driven organisation, such as our foreign airlines, will attempt to maximise gains in any market for that matter. This is slightly evident in the dollar per mile figure for first and business classes en route Lagos and Europe, but not so in regular economy.
“However, the word, ‘discrimination,’ may not apply as airlines’ revenue and yield management technology have improved on passengers’ right to such extent that you can name your price but conditions do apply. Tariff without restrictions does attract higher fares.”
Olowo said the only way out was for Nigerian operators to compete effectively with the foreign carriers.
“If Nigeria seeks lower tariff than it is currently getting, then the indigenous operators must compete effectively. It is, however, unfortunate that Nigerian airlines are all individually very weak and highly indebted. Competition remains the key for improved services and economic tariffs,” he added.
The Coordinator, Akwaaba Travel Market, Mr. Ikechi Uko, said the airlines were only taking advantage of the large size of Nigeria’s market.
He advised government to carry out a comprehensive survey before giving any directive.
Enumerating the causes of the high fares, the Head, Research and Statistics, Zenith Travels, Mr. Olumide Ohunayo, said, “Nigerians are naturally ego-tripping and enjoy swimming in affluence, whether it is economical or not. Also, public travel expenditure is deregulated without ceiling; all what public officials pass to their audit departments is the ticket coupon or receipt.
“Moreover, lack of travel planning by most Nigerians and delayed approval and processing, which have become a norm, make those fares inevitably expensive. This, however, improves the yield and profitability of the foreign airlines.”
However, a prominent travel agency operator, who spoke under condition of anonymity, said the Nigerian government should be blamed for the exorbitant fare regime being implemented by the foreign airlines.
The operator, an executive member of the National Association of Nigerian Travel Agents, noted that even the economy fares are equally very expensive.
He said, “Our government should be blamed for this rip-off. Government is meant to regulate the foreign airlines’ fare regime, but they are not doing so. In other climes, the fares are regulated by the government. Our indigenous airlines too have joined them.
“One of the ways you can know is that, during the off-season when demand is low, you see some of these foreign airlines halving their fares in the name of promotional fares. Almost half of the seats in the planes are sold at this amount (a little less than 50 per cent of what is charged in normal seasons). Yet, they still make profit. The fact is that even if government, after a comprehensive investigation, decides to slash foreign fares by 25 per cent, the foreign airlines will still keep coming to Nigeria.”
A former spokesman of the liquidated national carrier, Nigeria Airways, Mr Chris Aligbe, said the government should take a cue from Ghana by engaging the foreign airlines in business discussions that would lead to reduction of fares.
Aligbe, who is the Managing Director, Belujane Konsult, an airline consultancy firm, said the majority of the foreign airlines operating in Ghana had low fare regime for their premium classes because the Ghanaian government engaged them in business discussions.
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