The Chairman and Chief Executive Officer of United Airlines Limited, Prof. Obiora Okonkwo, has said that domestic air travel in Nigeria remains one of the cheapest globally, despite widespread complaints by passengers over rising ticket prices.
Okonkwo, who is also the spokesperson for airline operators in Nigeria, made the claim on Thursday while speaking on Channels Television’s The Morning Brief, amid allegations of airfare hikes by local airlines.
He argued that Nigerian carriers were operating under intense financial pressure but had continued to keep fares relatively low compared with what obtains in other countries.
According to him, airlines worldwide operate the same aircraft market and pay similar staff costs, but operators in Nigeria face higher operational expenses due to unfavourable loan terms, multiple taxes and dollar-denominated costs.
He said, “I think internal air travel within Nigeria is one of the cheapest.
“We know the rates around the world. If you get a ticket for $100, it must have been discounted, and there must have been someone in that aircraft who also paid $1000.
“We use high ticket prices to compensate for your low ticket prices. And we operate in the same market, buy aircraft from the same market, and pay staff like those airlines operating in other countries.”
Okonkwo noted that nearly all operational expenses in Nigeria’s aviation sector, including spare parts, maintenance and equipment procurement, are paid for in dollars, even though tickets are sold in naira.
He added that local airlines also access loans at interest rates of between 30 and 35 per cent, compared with 2 to 7 per cent obtainable by their counterparts in other countries.
“Our operational costs are enormous. And we here pay a lot of unexplainable taxes that don’t exist in many parts of the world. Still, we charge low.
“I fly around the world and pay about $1400 for a 45-minute flight. Multiply that. So, Nigeria remains one of the countries with the cheapest fares, and it is to the detriment of the operators.
“We have had high mortality rates of airlines in the past few years. It is good that we understand that everything has to be done to remove taxes, remove levies for the airlines to be marginally sustained,” he said.
The airline executive dismissed claims that operators were engaged in price gouging, attributing the recent spike in ticket prices to increased travel demand during the festive season.
He said similar trends occur during peak travel periods globally and even on Nigerian roads, stressing that airlines were prepared for seasonal surges through aircraft maintenance and scheduling.
Okonkwo also faulted the circulation of what he described as sensationalised ticket prices online, explaining that the most expensive fare categories were often mistaken for standard economy tickets.
Okonkwo stated, “I know it has been a hot topic in recent times. But airline operators are not doing anything unusual, because what I have seen recently, especially on social media, are the highest ticket category being shopped around.
“In any aircraft where you see a fare of N400,000, there are also some seats where passengers would have paid N100,000 in the same aircraft.
“But for an airline, at the end of the day, the average may not be more than between N120,000 and N150,000. We have a formula and pattern in which the fares are determined. We have six classes of tickets, even in an economy cabin. And there is a number of tickets we have to sell to break even, because you still have to service your aircraft, pay staff members, and other expenses.”
While expressing sympathy for Nigerians affected by high fares, Okonkwo recalled that when tickets sold for between N20,000 and N30,000, the naira exchanged at about N250 to the dollar.
“But today, even at the highest fee, which you see, it is barely 200 dollars. So, some of these tickets that you see circulating and being sensationalised were not economy tickets.
“They were either business class or premium economy tickets, which may have been bought on the day of travel,” he added.
His comments come amid heightened regulatory scrutiny of domestic airlines.
Last week, the House of Representatives urged the Federal Government to grant tax waivers to airlines and cut auxiliary charges by 50 per cent to reduce fares during the Yuletide season.
The Senate has also summoned the Minister of Aviation, Festus Keyamo, and other stakeholders over rising ticket prices.
Meanwhile, the Federal Competition and Consumer Protection Commission has expanded its investigation into what it described as suspicious and potentially exploitative increases in domestic airfares, particularly on routes serving the South-East and South-South.
In a statement issued last Friday, the FCCPC said it was examining pricing templates and ticketing practices of airlines to determine whether the fare spikes violate the Federal Competition and Consumer Protection Act, 2018.
The commission stressed that while it is not a price control body, it is mandated to protect consumers from exploitation and will take action where evidence of anti-competitive or collusive pricing is established.
