FG Moves To Reduce Domestic Air Airfares By 50%
LAGOS DECEMBER 19TH (NEWSRANGERS)-The Federal Government is tinkering with the idea of subsidizing airfares to reduce the high costs of tickets.
The Minister of Aviation and Aerospace Development, Mr Festus Keyamo was said to have held a meeting last week Friday with airline operators through their umbrella body, Airline Operators of Nigeria (AON) with a view to fine-tuning modalities for its realization.
Present at the meeting with the Minister are the President of AON, Dr Abdulmunaf Yunusa Sarina, and members of his executive and other airline operators.
An airline operator who pleaded anonymity hinted Aviation Metric about the meeting and said the idea stipulates that passengers travelling via the existing airlines would have to fill out forms that would be handed to them by the carriers.
These duly filled forms would be transferred to the Central Bank of Nigeria (CBN) for 50% of the value of the tickets after tax and charges deduction, particularly the 5% Tickets Sales Charge (TSC) statutorily taken by the aviation regulatory body, the Nigerian Civil Aviation Authority (NCAA) on behalf of some of the agencies.
The source disclosed that both the Ministry of Aviation and the airline operators are working on the modality or blueprint and plan to meet again before the end of the year while implementation may begin next year in February.
“The Minister had a meeting with the airline operators with a plan to subsidize air travel by 50%. The meeting was held last week. They are still working to smoothen the rough edges of the entire plan. The idea is that anyone who wants to travel picks a form, and fills in her/his details. This information will be sent to the CBN for a refund of 50% of the value of the ticket price”, the source said.
Travel subsidy if and when it eventually comes on stream could increase passenger traffic numbers and one capable of improving the fortune of the airline business and the aviation industry, particularly at a time when the airlines are challenged.
The high cost of air travel in Nigeria has seen a sharp drop in passenger numbers and has affected the propensity of many Nigerians to fly.
The propensity to fly goes up when people have enough personal income to afford vacations and when growth in the overall economy reflects growth in business and therefore the need for business trips.
Having enough money for travel requires a strong economy reflected in healthy growth in gross domestic product (GDP).
The move if it succeeds would equally increase the revenue of the various aviation agencies as many more people will embrace air travel just like it is done in developed nations where air travel is cheaper because of the volume of people travelling by air.
It would be recalled that a one-way ticket that sold for N35,000 in 2021 skyrocketed to N50,000 in a few months which elicited public outcry.
Airline operators attributed the fare rise then to the high cost of jet fuel which went up from N195 per litre to N350 per litre. Jet fuel takes about 45% of airline revenue.
The following, precisely, 2022, airlines cited the high cost of operations occasioned by the devaluation of the country’s currency and the continuous rise of aviation fuel, the airline owners increased fares to N75,000 from N50,000 depending on the time of purchase.
Currently, fares from Lagos to Abuja for instance are as high as N100, 000 and more with many taking the dangerous option of travelling by road because of the exorbitant fares.
This Yuletide, generally considered a high season in aviation, fares to cities like Owerri, Enugu, Anambra, Port-Harcourt, Calabar, Uyo, Asaba and Benin attract fares as high N160, 000 and N200,000 for an economy one-hour flight as many of the carriers are said to be fully booked till the second week in January 2024.
AviationMetric
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Posted by News Rangers
on Dec 19 2023. Filed under National.
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