FX rates could push plane ticket prices up to 100, 000.
Flight operations resumed in Nigeria in July after about a four-month pause to observe the COVID-19 pandemic.
During this time, the aviation industry took some hit like other sectors of the economy and the Q3 report gave the numbers. According to the Q3 2020 GDP report, aviation which was the fastest-growing sector in 2019, contracted by 38.9%.
Compelled by the contributions of the sector which has an integral effect on the economy, stakeholders and the legislative arm pushed for a bailout of N50bn from the FG but got a proposal of N4bn.
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The airline operators have argued that the sector won’t survive on this amount. However, the new ticket price hike is possibly influenced by other factors related to sustaining the aviation sector.
Plane ticket prices are following FX rates
Ticket prices soared to around N82 – 92 000 and could increase further to around N100 000 before Christmas or the end of 2020. Airlines are utilizing the parallel market – currently, N490/$1 – for FX in contrast to the previous rate of N360$1.
The outcome of this is further reflected in the rising prices of domestic plane tickets, as operating costs are met with this high FX.
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Operational aeroplanes are also fewer due to the inability to source FX at the official rate of N390$1 to buy spare parts for maintenance.
Service charges have also surged as the Federal Airport Authority of Nigeria, FAAN, introduced new fees.