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Concerns Mount Over Airfare On Lagos-London Route

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Lagos travellers pay 439% more

Why we charge different fares from Nigeria-London — BA

Passengers travelling from Lagos to London in the coming days might be forced to travel through Abuja to their destination.

This is coming on the heels of massive differential in airfares for passengers travelling to Heathrow Airport, London through Lagos and those going through Abuja.

Findings by Vanguard Aviation World show that passengers flying on one-way economy ticket through Abuja on British Airways, BA, pay $501 (about N222,093) while those travelling through Lagos on the same airline and ticket class pay as much as $2,700 (about N1,196,910)

Also, passengers travelling through Ethiopian Airline on one-way economy ticket through Abuja pay N700,000, while those going through Lagos on the same airline and ticket class pay as much as N2.8million.

The fare differentials, according to industry operators may not be unconnected to demand and supply differentials but also noted that the distance is almost same for the two routes.

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Vanguard gathered that flights from London to Abuja take six hours, and 20 minutes, while flights to Lagos from London take six hours and 25 minutes.

Though Air France maintains same fares from both routes the amount is also high at $2,141 (about …) on similar ticket class for a one-way journey.

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Passengers’ reactions
A traveller who spoke to Vanguard about the development lamented her amazement to the development.

According to her, “I was to travel to London next week. So in a bid to ensure i pay less, I open the booking portal of BA, I was in Abuja and I mistakenly clicked on Murtala Muhammed International Airport, MMIA, and i was taken to the price to my amazement, the price i saw there was $2,700 I was shocked.

“I had to check very well to see if i had punched something odd. I realised I inputted Lagos instead of Abuja. So I had to readjust and the price I finally saw was far lower. This was quite outrageous as it was not supposed to be so.”

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Another traveller who spoke to Vanguard Aviation World, said: “Why will Ethiopian Airline, and Africa airline put their airfare to London this high? I was expecting their price to be lesser than others but I was wrong.

“Even the price in Lagos differs by a far margin. Why would it be so?

“The ministry responsible should look into it, as for me it can only be attributed to extortion.”

Why our airfares differ in Nigeria – BA

Speaking to Vanguard Aviation World on the situation, BA’s Spokesperson, Josephine Simmons, explained that airfares can differ due to availability, airport taxes and other factors.

She stated: “Prices differ by airport due to numerous factors including customer demand and fare charges – including airport taxes.

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“Most customers book their flights in advance, benefiting from competitive fares.

Other stakeholders comment
The development has created a series of reactions from both stakeholders and travellers across the country.

While some stakeholders attributed the development to the exploitation of Nigeria’s passengers, others stated that the less demand in Abuja was strengthened by the security challenges.

According to the Principal Partner, Avaero Capital, Sindy Foster, the development possibly might be due to more demand than supply in Lagos.

“If BA had more demand from Abuja price would probably be higher. Most people are not flying direct between Abuja and London. I expect demand for Abuja went down due to security issues.”

Flights tend to be lower if there is more supply against demand. It is good that prices have come down in Abuja. Will be interesting to work out why they are still high in Lagos. I suspect there is less demand for Abuja.

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The chairman of United Nigeria Airline, Obiora Okonkwo, said: “Why do foreign airlines charge Nigeria so much?

“In the aviation industry, one-hour flight fuel consumption is the same, the only difference is maybe different landing charges in London or Ghana, the rest is the same.

“I can assure you that if Air Peace goes to London today, Nigerians will fly to London with an Economy ticket of N500,000. Today the price is about N2 million, why should we pay such if they are converting from N450 to $1?

“We owe Nigerians this explanation. However, whatever is going on, this is a wake-up call that the local operators have to be supported as they have all it takes to operate internationally.

“Emirates have over $5 billion in support from their government. When we ask for support, it is not free, we pay back. American Airlines have equity of over $60 billion and a debt profile of $70 billion and those debts all come from government support.

“If the local airlines are supported, we can have the capacity that cannot be threatened globally. The easiest flight to operate is a long haul. Short haul is even more difficult as it is stressful to both the aircraft and cabin crew.

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“It is even easier to go to London, aviation is the same globally, you are audited by IOSA, IATA and that is, they prevented us and make us looks bad.

“They are also aware that our quality and regulatory standards are high. We get crews and captains coming to Nigeria and they fail our exams and we send them back.”

Foreign airlines frequency in Nigeria
It would be recalled that Nigeria, a destination of over 22 foreign carriers, manages Bilateral Air Services Agreements, BASA, with over 78 countries.

These airlines operate daily, and weekly in Nigeria.

Ethiopian and ASKY, Togolese airline also operated by Ethiopian Airline, together operate 54 frequencies weekly in Nigeria.

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African World Airways (AWA) has 49 frequencies per week; British Airways and Virgin Atlantic operate 21 frequencies weekly into Nigeria; EgyptAir with 16; Air France 15; Saudi Arabian Airways 13; Emirates 11; Lufthansa 11; Air Cote d’Ivoire10; Qatar 9; South African Airways 7.

Others were Delta, Royal Air Maroc, RwandAir, Sudan Airways, and Turkish Airways, which enjoy seven frequencies without reciprocity from Nigerian airlines.

Also, Etihad has five frequencies; Fly Mid Africa has four; Middle East Airlines – has four and Air Italy formerly Meridiana has three weekly flights to the country.

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JUST IN: CBN Increases Interest Rate To 24.75%

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The Monetary Policy Committee of the Central Bank of Nigeria has today concluded its two-day meeting for March 2024.

This meeting marks the second MPC meeting for the year 2024 and also the 294th meeting of the CBN.

The MPC at the end of today’s meeting elected to hike the MPR by 200 basis points.

The Committee voted as follows: Raise the MPR by 200bps to 24.75 from 22.75 per cent
Increase the asymmetric corridor to +100bps/-300 basic points.

READ ALSO: JUST IN: CBN Sells Forex To BDCs At N1,251/$1

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Retain the Cash Reserve Ratio of Deposit Money Banks at 45 per cent and Adjust the CRR of Merchant banks from 10 per cent to 14 per cent.

The CBN retains a liquidity ratio of 13 per cent.

Details later…

 

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JUST IN: CBN Sells Forex To BDCs At N1,251/$1

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The Central Bank of Nigeria (CBN) has issued a circular to Bureau De Change (BDC) operators informing them that they sold $10,000 to each BDC at a rate of N1,251 per US dollar.

Nairametrics reports that the CBN, in a circular, instructed each BDC to sell the dollars to eligible customers at a rate not exceeding 1.5% above the purchase price.

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It reads: “We refer to our letter to you referenced TED/DIR/CON/GOM/001/071 in respect of the above subject wherein the CB approved a second tranche of sale of FX to eligible BDCs.

“We write to inform you of the sale of $10,000 to each BDC at the rate of N1,251/$1. The BDCs are to sell to eligible end users at a spread of NOT MORE THAN 1.5 per cent above the purchase price.”

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Financial Institution Launches Indigenous Micro Insurance Software To Boost Customers Confidence

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The acting Managing Director, Prudent Choice Micro Insurance, Mrs. Gloria Onosolease, has said that the launch of its indigenous micro insurance software, named Insuretech, will help boost customers confidence and ensure accountability in the sector.

She disclosed this during the official launch of its Insuretech software in Benin.

Mrs. Onosolease said the achievement will significantly shape the nascent micro insurance landscape in Nigeria and indeed, across the African continent.

Onosolease said the newly developed software heralds a pivotal advancement in enhancing customer interaction and satisfaction, while concurrently optimizing their internal operations to foster efficiency.

She added that in a fiercely competitive industry such as insurance, embracing technology is indispensable to their continuous success and sustainability.

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She said that the micro insurance sector in Nigeria, particularly in Edo State, is undergoing a phase of unprecedented growth with a population exceeding five million people where a substantial portion of which is engaged in low income and medium sized enterprises spanning rural, urban and semi-urban areas.

She said due to this, there exists an urgent demand for accessible and inclusive insurance solutions but regrettably, this demographic has long been underserved and marginalized in terms of insurance protection.

She further said that with the launch of Insuretech, it will help mitigate the financial risks encountered by low income earners and small to medium scale enterprises.

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