Sky High Expenses: Unravelling the mysteries of expensive flights to Nigeria
As the time for December approaches, many are eager to travel back to Nigeria for the holidays (to spend time with family and not for Detty December of course). However, the ongoing issue of expensive flight tickets remains a pressing concern for many, with the average cost of an economy ticket for a direct flight from London to Lagos in December costing £1,600. Considering it's just a 6-hour trip, this price is notably high.
Many have voiced their dissatisfaction regarding the exorbitant prices of flights. Some believe these high costs stem from the exploitation of Africans by international airline companies, whilst others perceive it as a straightforward matter of supply and demand.
So why is flying to Nigeria so expensive? Let’s take a look at a few major factors.
In peak seasons like Christmas and Easter, the law of supply and demand does come out to play, so to put it plainly, when there's a surge in demand for tickets, prices naturally rise. However, this fundamental economic principle isn't the sole or even major explanation for the high prices observed when traveling to Lagos.
A notable reason behind the exceptionally high cost of flying to Nigeria during peak periods could be the financial constraints faced by airlines. Reports indicate that airlines operating flights to Nigeria face elevated operational costs due to underlying structural issues. International airlines have encountered challenges in repatriating their funds from Nigeria, with their money being held up in the Central Bank of Nigeria. The latest data from the International Air Transport Association reveals that the total amount of foreign airlines' funds detained in Nigeria has reached $812 million. This predicament results in airlines struggling to transfer their commercial revenues. This can also be coupled with the depleting and fluctuating value of the Nigeria Naira, which makes operating in Nigeria more expensive for airlines (and businesses in general). Consequently, this poses a significant threat to airlines and their operations in Nigeria, escalating business risks. To counter these risks associated with doing business in Nigeria, airlines are compelled to pass on higher prices to consumers as a means to navigate and mitigate these challenges.
The Nigerian government has been known to impose substantial levies on airlines, encompassing a range of taxes and fees for various services, including landing and parking at airports. These levies are regarded as some of the highest in taxation placed on airlines within the African continent. Reports suggest that nearly 40 to 50 percent, of the total cost of a consumer’s airline ticket comprises these taxes, charges, and fees.
This taxation burden can significantly affect the cost structure for both airlines and passengers, making air travel in Nigeria relatively more expensive compared to many other African countries. The high taxation rates have been a subject of concern for the aviation industry, impacting its competitiveness and potentially influencing the affordability of air travel for those wanting to travel to Nigeria. However, with the substantial revenues from taxes collected by the Nigerian government, questions arise regarding the allocation and utilisation of these funds. Ideally, these tax proceeds should be reinvested to enhance the efficiency and infrastructure of the sector, yet, if you take a trip to Murtala Muhammed airport, there's limited evidence demonstrating that this has been done. Nonetheless, Addressing and potentially revising these levies may be a necessary step to enhance the sustainability and accessibility of air travel in the region.
Corruption will always undermine the integrity of any system, and Nigeria's aviation industry is not exempt. Many of the industry's structural inefficiencies can be traced back to corrupt practices. The involvement of multiple stakeholders and agencies entangled in these practices creates a lot of dysfunction within the industry. These corrupt practices lead to many challenges, compelling airlines that operate within Nigeria to adopt additional preventive measures to counter the inherent risks of doing business in such an environment. For example, it has been noted that airlines have to hire additional third-party security agencies in order to ensure adequate security measures have been taken, because of the corrupt practices amongst airport staff, as a result this increases overall expenses, which passengers will bear the burden.
Lastly, the void left by the absence of a national carrier has paved the runway for international giants such as Virgin and British Airways to establish a near monopoly on direct flights to Nigeria, with their dominance granting them the leverage to dictate prices at their discretion.
However, the root cause of Nigeria's lack of a national carrier can be traced back to issues of corruption, as it primarily stems from the substantial mismanagement of funds. This continuous financial mismanagement has led to repeated failures in establishing a sustainable national airline.
In essence, the absence of a national airline not only results in reduced competition and price dictation by international carriers but also intensifies the industry's reliance on international airlines and perpetuates their dominance in the market.
Navigating the costs
Consider non direct routes.
Book flights well in advance of peak periods.
