Could Nigeria’s airfares go up? - CNBC Africa

Could Nigeria’s airfares go up?

Western Africa

by Dara Rhodes 0

Nigeria's aviation sector to lose 150 billion naira annually. PHOTO: Getty images

The move, that is contrary to the Bilateral Air Services Agreement (BASA) which Nigeria signed with home countries of the foreign airlines, has been estimated to cost the sector a whopping 150 million naira annually.

“They haven’t announced it, which says that they are thinking about it and they haven’t really come to the decision right now. That’s my take on it,” Pekun Sowole, aviation lawyer at Juris Law Legal Practitioners told CNBC Africa.

“Basically what they are saying is that, the commercial agreement which allows foreign airlines to operate outside their air space and into Nigeria which they would normally negotiate and pay for, is going to be scrapped.”

[video]

The International Civil Aviation Organisations and International Air Transport Association support the move as they believe that airlines should be allowed to operate in each other’s countries without paying royalties.

“I think at the end of day, it’s probably a ploy. Like, let me give them free entrance into Nigeria and then I’m going to increase taxes on the tickets.”

“At the end of the day, it is going to mean that while the airlines don’t get to pay for those charges, it’s going to be the passengers paying the charges because the airfares will go up. Definitely, that’s what will happen,” he explained.

Nigeria’s aviation sector is currently roped in debt of 174 billion naira and continues to battle numerous challenges such as poor infrastructure, lack of sufficiently trained staff and proper regulations.

(WATCH VIDEO: Nigerian aviation plagued with safety challenges)

“Whether they do it or not, Nigerians don’t get to benefit either way because we get to pay for it. The airfares go up so you pay more,” he added.

Despite the gloomy past the sector faced, it has been projected that Nigeria will record 15 to 16 million passenger movement by the end of 2014 with the number on a continual rise as the country’s rebased economy attracts more foreigners while more Nigerians travel locally and overseas.

(WATCH VIDEO: Outlook for Nigeria aviation sector)

“Currently, Nigeria is probably the most expensive place to do business. The taxes in Nigeria are way too high so nothing has changed. When they were paying, did it benefit the travelling public? No. So if they are not paying, it will still not benefit us. We will pay more and that’s just what is going to happen,” he concluded. 

Comments