International Airlines operating in Nigeria have increased their air fares following the instruction from IATA, the global body for airlines in the world.
According to reports from the Aviation sector, airfares quoted in Naira will attract an increase of about 18% starting September 1 2017.
Airfares in Nigeria are quoted in Nigeria after they have been converted to dollars by Airlines. This is done using the official exchange rate as published by the Central Bank of Nigeria. Since the CBN adopted N305 as its official exchange rate last year, airlines have converted airfares quoted in dollars to naira using that exchange rate.
However, they have now decided to use the exchange rate closer to the NAFEX (Nigerian Automated Foreign Exchange rate) used by investors and exporters to import forex into the country. Reports suggest, they will be using N359 as the new exchange rate and not N305 as previously utilized earlier in the year.
Airlines had previously increased fares two weeks ago using N326 as the exchange rate, however they claim it is not enough for them to break-even. Operators inform us that this is why getting tickets for some routes is difficult in some airlines except they book from a portal located outside Nigeria, where they have to pay in US dollars.
According to operators, the fare change will affect Nigerians who booked for tickets online in naira but did not pay before the go live date of September 1, 2017. Even if you booked at the old rate, you will have to pay the differential to confirm your booking and obtain your ticket.
Most corporates who had scheduled business travel for the latter part of this year will also see their travel budget balloon except they change course.
Travel agencies are also likely to be negatively affected as tickets sales, which has plummeted since the exchange rate crisis, could likely fall even further.