Passengers on Nigerian air routes have been alerted of an impending increase in airfares as International airlines have adjusted exchange rates for ticket prices to ₦803/$1.
This was confirmed by the International Air Transport Association (IATA) as they informed stakeholders of a change in the exchange rate from ₦776.90/$1 to ₦803.90/$1.
While stakeholders have fingered the IATA as being responsible for the price increment, the aviation body has denied being in control of the exchange rate applied to international flight tickets sold in Nigeria.
According to IATA, airfares for international flights from Nigeria are based on US Dollars and then converted to Naira, which is the local currency in the Nigerian market.
“IATA simply applies the spot rate at which the Central Bank of Nigeria (CBN) sells USD through banks to the market, at its fortnightly retail foreign exchange auctions.
“The rate is not static, i.e. if the rate at which the CBN sells USD goes up, the exchange rate applied to airfares will follow and vice versa”, IATA clarified in a statement issued.
According to Nairametrics, the CBN’s revised operations for the forex market had led to most airlines benchmarking their ticket sales against the value of the exchange rate at the I&E window.
Apart from the pending crisis where international airlines have been unable to repatriate ticket sales for over a year, this adjustment in airfares is a reaction to the floating of the naira by the CBN.
Last month, the IATA set the exchange rate from ₦663/$1 to ₦770, a move which automatically led to a massive spike in ticket prices.
The increment saw a hike in airfare prices as a six-hour flight from Lagos-London for an Economy class ticket hovered between ₦1.3 million to ₦2.5 million while Business class tickets sold for between ₦3.36 million to ₦4.8 million.
The global aviation body, however, advised ticket agents to first exhaust the unfinished tickets they have in their possession by the close of business on Monday, July 17, 2023, to avoid a potential rise in ticket prices.
