Dare Babalola
Prof. Obiora Okonkwo, Chairman and CEO of United Airlines Limited, has countered widespread complaints about rising ticket prices, stating that domestic air travel in Nigeria remains one of the cheapest globally, despite the recent hikes.
Okonkwo, also spokesperson for Nigerian airline operators, made the assertion on Thursday during an interview on Channels Television, amid growing allegations of steep airfare increases by local carriers.
He argued that Nigerian airlines are navigating tough financial challenges, yet have managed to keep fares relatively low compared to other countries.
According to Okonkwo, airlines globally use the same aircraft and pay comparable staff costs, but Nigerian operators face added hurdles, steep loan rates, multiple taxes, and dollar-based expenses, that drive up operational 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.
