Still rising: Airfares increase in Nigeria

+How to Save Money on Flight Tickets in Nigeria

Airfares in Nigeria have increased by 57% over the past year. According to the National Bureau of Statistics (NBS), the airfare for specified routes on a single journey in September 2024 rose by over ₦45,000 compared to the same period in 2023.

This increase has been attributed to fluctuations in aviation fuel prices and exchange rate volatility, leading to rising operational costs. 

Higher airfares in Nigeria have several implications: elevated travel costs for consumers, decreased demand for air travel, adverse effects on tourism, increased operational costs for businesses that depend on air transport and inflationary pressures on related sectors such as hospitality and logistics.

Across Africa, a similar trend is evident in the demand and aeroplane seat availability data. Overall, the number of aeroplane seats in Africa decreased by 3.58%, suggesting a reduction in available flights.

Demand for aeroplane seats varies across Africa, with significant drops reported in Eastern and North Africa, while Southern Africa saw an increase in seat capacity. 

The "Seats by Region" metric represents the number of seats available to, from, and within each African subregion for the specified period. 

Uneven seat distribution could be due to factors like demand elasticity, operational challenges, and regional economic conditions, which airlines are addressing by strategically adjusting capacities to align with market demand.

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Fuel Costs, Exchange rate, and Airfare Correlation

Data between September 2023 and March 2024 indicate a 71% correlation between airfare charges and aviation fuel costs. 

This shows that there is a moderate to strong positive connection between the two variables, indicating that domestic flight costs tend to climb in tandem with increases in aviation fuel prices, as airlines likely pass some of these increased expenses onto consumers.

The depreciation of the Naira against major foreign currencies was another reason stated to have led to the increase in airfares in Nigeria. 

However, data shows that Nigeria's exchange rate volatility is moderately linked to changes in airfares. 

The Naira to Dollar exchange rate is 69% correlated to airfare charges for a single journey between September 2023 to September 2024.

The World Bank emphasises that countries that rely significantly on imported items, such as aviation fuel and aircraft parts, which are valued in foreign currency, are significantly impacted by exchange rate depreciation. 

In Nigeria, where the value of the Naira has declined significantly, the price of these imports has skyrocketed, leading to increases in airfare. 

In a similar vein, Statista noted that exchange rate volatility has been a major contributor to inflation in the travel and tourist industries, putting pressure on consumers and lowering demand for air travel.

According to the International Air Transport Association (IATA), aviation fuel can make up as much as 30% of an airline's operating costs. As a result of recent rises in fuel prices worldwide, airlines are forced to pass these costs on to passengers, which results in a considerable increase in fares.

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How to Save Money on Flight Tickets in Nigeria

According to CNBC,  finding good deals on air flight tickets now requires new strategies. Here are some useful tips if you’re looking to cut costs on your next flight.

Consider using a travel agent or agency. travel agents have access to exclusive fares and can often secure discounts of up to 10% on packages that may not be available to the general public.

Staying flexible and planning ahead is also essential for finding low-cost tickets, but now it is even more important. Opting for budget airlines can also lead to substantial savings.

Travelling during off-peak periods, such as after major holidays is also another tip for finding cheaper flight deals

Experts recommend booking flights within specific time frames to lock in the best rates, usually 1 to 3 months ahead for local trips and 2 to 8 months for international travel. 

Now is one of the best times to also redeem any loyalty points or travel miles you’ve accumulated from other trips and look out for a promo. Points can reduce out-of-pocket expenses significantly.

Thanks for reading this edition of Pocket Science. It was written by Khadijat Kareem and edited by Joachim MacEbong.