Capt. John Ojikutu (rtd), general secretary of the Aviation Round Table Initiative (ARTI), has warned the travelling public to prepare for an increase in airfare due to the floating of the naira, which has resulted in growing airline operational costs.
LEADERSHIP reports that the Central Bank of Nigeria (CBN), has floated the naira, thereby, allowing market forces determine the exchange rate of the naira to foreign currencies.
With the rising dollar rate, there would be increase in the operational cost of airline, especially, while acquiring spare parts and maintenance of the aircraft abroad.
However, in an exclusive chat with LEADERSHIP, Ojikutu, who is also the chief executive officer, Centurion Aviation Security and Safety Consult said, for airlines to meet the operational costs arising from fuel, dollar rate, low passengers among others airfare must increase.
He said: “It is difficult to get stable airfare now that there are too many variables costs on imported jet-A1 and the exchange rate on dollar. Also, don’t forget that spares for the aircraft maintenance are not local but imported.
“I have repeatedly said that if airfare was $100 at a time the exchange rate was N40/$ and fuel was being refined locally we should expect it more than triple now when the dollar rate has gone more than ten times and fuel is being imported.”
He also disclosed that since intervention from government have stopped, airlines would rely solely on fares to survive. “Airlines have been enjoying irrational intervention funds from government and debt concessions but unfortunately these are not affordable any more. Furthermore, about 60 to 70 per cent of the traveling passengers are government and corporate officials unfortunately too, these figures can no longer be guaranteed for the airlines flights.
“Therefore, to meet the operational costs arising from fuel, dollar rate, low passengers, among others, the air fare must go up,” he declared.