BY BRIGHT JACOB
The dust generated by the recent hike in airfares may not be settling down anytime soon as Nigerians continue to berate and boycott the airlines for the increase.
Domestic airline operators under the aegis of Airline Operators of Nigeria rose from a meeting in Lagos and resolved to increase airfares by as much as 100%. Though it was scheduled to take effect from March 1st, air travellers have already started paying the new charges.
In the statement the operators issued, they listed the high cost of Jet A1 (aviation fuel), unavailability of forex they claimed put them in a “life and death” struggle to secure, high ground handling charges, inflation, among others, as reasons for the increase.
The Point asked Fred Aigbadumah, a legal luminary and social commentator what the recent hike portends for Nigeria. According to him, the effects would encompass the different strata of our national life, which would not remain the same again. He also said Nigerians had been left to their fate in their choice for a secured means of transportation.
“This question (about what the hike portends) is a loaded one, because you would be talking about the political effect, social effect, economic effect, security effect of the hike. A lot of people can no longer travel by road because of the height of insecurity on the highways, and we all know those responsible for that,” he said.
Continuing, he said air transportation was not a luxury for Nigerians, and compared with other forms of transportation, it remains the safest.
“The government of the day is not too keen or concerned about addressing insecurity on our highways. So, everyone, even those who cannot ordinarily afford air travel, have decided to make some sacrifice to be able to travel by air for its safety.
“No transportation system is absolutely safe. However, when you compare the three modes of transportation in Nigeria, air travel remains the safest.
Unfortunately, what they’re trying to say now is: if you cannot afford to pay our fare, you can as well go by road,” he added.
Reacting to the complaints credited to the airline operators for the hike, especially the scarcity and increase in the price of aviation fuel, Aigbadumah said there was no official increase yet in petroleum products. In his opinion, the airlines took back with the left hand what they gave with the right hand.
“There’s no recent increase in aviation fuel or fuel generally. If there was an increase in something that had been done before now, the question to ask the airlines would be why they brought down the price of airfares in the first place, because early this year, after the Christmas travels when most people had returned to their bases, they (airlines) looked at the situation and decided to attract customers.
“They brought down the price by about 50%. Now, however, it’s like what they gave with the right hand, they’re taking with the left hand. We call this neocolonialism in political economy. They have taken it back by skyrocketing prices and made it (air travel) more and more unaffordable to the common man. It’s like saying ‘go and die’ if you are a common man in Nigeria,” he further submitted.
Aigbadumah also noted that it was possible for the prices of petroleum products, aviation fuel inclusive, to return to their status quo if there was an increase in supply and the market was open.
According to him, most filling stations outside Lagos sold fuel at over N200 per litre. Within Lagos, most of them sold above N162 or N165, because they (filling stations) were looking at the economic factors of demand and supply, the rush for it (product), and because there was no substitute or option for the use of petroleum products.
In Aigbadumah’s estimation, “No matter how often they increase prices, people will still buy, but we all know that once there’s an increase in supply and the market is open, the price is likely to come down again, except if there’s a clear and deliberate government policy to increase the price.”
When presented with the position of the Senate which had protested the hike and called for a state of emergency to be declared on federal roads, and also asked if they (Senators) were helpless to effect any changes, Aigbadumah was of the opinion that the National Assembly as a whole were “not true people representatives” and not ready to do anything to help the masses.
He told our correspondent that members of the National Assembly were not concerned about their constituencies, but only had an interest in their future political ambitions.
According to him, “we don’t have a genuine, solid and sincere National Assembly”.
He also added that the directive given by the Senate should be about the concrete steps taken by the Senate.
He explained that nothing substantial had been budgeted by the National Assembly for road rehabilitation and construction.
“Look at the budget. What have they budgeted for roads? It’s not a question about giving orders or directives, but deliberate legislation has to be made. So, when they give an order and there’s no budget, it’s just sheer waste of time,” he said.
On the ways government can intervene, Aigbadumah, who is also a political analyst, said the government had to be sure about the exact rate per litre of aviation fuel, and that the law enforcement agencies or regulatory bodies that are supposed to checkmate, inspect and supervise or monitor the sales and distribution of such products, be allowed to do their work.
He further stated that it was high time Nigeria got her priorities right as a nation, because Nigeria was the only nation that exported crude oil and brought back imported oil for direct consumption.
“The oil we consume is far lesser than what we produce. We are the only country in the world that will package crude oil and send it abroad as export, and bring back imported oil for direct consumption, which is never done in any economy. The refurbishing and rehabilitation of our refineries were part of the mantra or campaign slogan of this present regime. They promised that petroleum products would even be in our backyards, but we know where we are today,” he concluded.
In his own assessment of the situation, a senior lecturer in the Department of Petroleum Engineering, University of Benin, Onaiwu Oduwa, said the hike in airfare “was bound to happen”.
He also alluded to what seems like a conspiracy theory. According to him, the recent incident with the adulterated fuel, and the attendant fuel price increase were ploys used by the airlines to also increase their fares.
“It was bound to happen, in the sense that government brought adulterated fuel into Nigeria so that they can find a way to increase the pump price, which they have done quietly. Also, as those issues were going on, they increased electricity tariff,” he said.
Giving further insight, he said, “The airline people cashed in on the chaos in the country to also increase their fare. If they were to do that when everywhere was calm, people’s reactions would have been different. But because the people were grappling with the adulterated fuel, which was the main issue, we heard about the tariff (electricity) increase, and did anyone complain? They didn’t because everyone was still shouting “give us fuel”. Now, airfares has come, and everything looks like a planned work happening within this time,” he said.
Reacting to the complaints given by the airlines on why the hike had to be, Oduwa noted that the increment was not worth it. He said the distance planes covered within Nigeria was a short one, and that the airlines were trying to take advantage of government’s ineptitude.
“Why would you charge N70, 000 or N80, 000 from Lagos to Benin? The increment is not worth it. They’re just trying to cash in on the inability of our government to regulate price. Because the Nigerian Civil Aviation Authority said that airfare is deregulated shouldn’t mean that people can just wake up and because they have a union, they all increase their fares at the same time, and the government will not do anything” he said.
Oduwa added that the problem with the government was that it lacked the political will to do the right thing because it had vested interest in the whole matter.
He said, “We are going into an election year. Some of these airline owners have the political parties they’re backing. They have those they are trying to work for, and the masses are the ones who suffer for it.”
“The airline people cashed in on the chaos in the country to also increase their fare. If they were to do that when everywhere was calm, people’s reactions would have been different. But because the people were grappling with the adulterated fuel, which was the main issue”
Speaking on the decision of airlines in the country to hike their base fares to N50, 000, head, Retail Investment Management Group at Chapel Hill Denham, Ayodeji Ebo, noted that while the decision was rational, it will lead to a sharp reduction in the number of travelling passengers for the airlines.
He said “I believe that it is in line with current realities if you look at exchange rates which affect their cost of operations as well as the cost of fuel that they use. But the implication is that it will reduce patronage for them. The occupancy rate for them will be reduced because the minimum base of N50, 000 that has been set.
“Only a few people will be able to afford it and in the light of the adoption of virtual meetings, it will only be very essential business trips that business people will embark on and for those that use it for personal travels, it will only be those that can afford the rate.
“Because of the risks, more people will tend to stay where they are. If you look at the level of insecurity, you can’t use the road and you can’t afford the flight then it means that you will stay where you are. This means it is only essential journeys that will be embarked on and it will reduce the number of people that travel as more people will adopt virtual meetings.”
On his own part, Akpan Ekpo, a Nigerian economist and the Chairman of the Foundation for Economic Research and Training said the 100 per cent hike is unfair, as he called on the government to interfere.
He said the government will have to pay more as it often carries the burden of the tickets of officials and guests travelling to and fro every part of the country.
Therefore he said “the 100 per cent is just too high, they need to explain why the hike should be 100 per cent. They should let the government see their cost profile and negotiate. Many people are already complaining because the hike should not be 100 per cent. You don’t just increase pieces by 100 per cent.
The price of Jet A1 (aviation fuel) has skyrocketed from N190 in 2021 to over N429 in 2022, thereby, making ticket fares skyrocket by 100 per cent.
However, airline operators raised the alarm over the skyrocketing price of aviation fuel by over 100 per cent to N400 within a year.
The operators had called on the federal government to address the infrastructure challenges in the industry in order to enhance the on-time performance of operating airlines, especially, the scheduled operators.
Before now, the economy class fares hovered between N23, 300 and N48, 000, although rates rose to as much as N70, 000 during the last festive season.
Air travel in the country has witnessed increased patronage in recent years with rising insecurity that has seen many roads taken over by kidnappers.
