Airfares drop on international route over naira appreciation, Air Peace debut
Airfares for travels from Nigeria to other countries have seen a significant drop, following the appreciation of the naira and the competition arising from Air Peace’s debut on the Lagos-London route.
The pressure on the foreign exchange market has eased as naira on Monday appreciated to 1,340 per dollar on the parallel market, stronger than 1,408.04/$ on the official market.
This represents an 8.21 percent gain against the dollar, compared to 1,450/$1 on Monday at the unofficial market.
The large naira depreciation caused by the FX reforms that started last year had led to a steep rise in the International Air Transport Association (IATA) rate for ticket sales.
As of Tuesday, the IATA rate for ticket sales in Nigeria dropped from almost N1,800/$ a few months ago to N1,468/$.
The drop in the rate quickly saw the prices of tickets drop across several destinations.
For instance, a one-way ticket from Lagos to London on British Airways that was sold for N3 million (Economy Class) and N11 million (Business Class) cost N1.7 million and N6.8 million respectively.
On Lufthansa, the price of a one-way ticket from Lagos to London dropped from N3 million (Economy) and N9 million (Business) to N2 million and N7 million respectively.
On Virgin Atlantic, the price for Economy, Economy Premium and Business Class fell from N2 million, N5 million and N12 million to N1.5 million, N3 million and N6 million respectively.
Stakeholders say the reduction in ticket price by Air Peace on the London route also played a significant role in cut in prices by foreign airlines.
Bankole Bernard, chairman of Airlines and Passengers’ Joint Committee of IATA, described the Air Peace London flight as a welcome development.
He said: “Air Peace is not going to be faced with foreign exchange challenges because the fares will be in naira. It is a welcome idea for travel agents and Nigeria as a whole. We appeal to Air Peace to try its best to sustain the London route. We are willing to give them all the support to ensure this is successful. With Air Peace, travel agents envisage a 50 percent fare reduction.”
