As moves to reconcile repatriation of trapped foreign airlines fund thicken, International airfares, particularly on Nigerian routes, may skyrocket as the International Air Transport Association (IATA) sets the exchange rate at $1 to N770.
The inability of international airlines to repatriate ticket sales for over a year has contributed to high airfares on Nigerian routes.
Economy ticket prices have jumped from N400,000 to about N1.2 million, while business class tickets range from N4 million to N6 million, depending on the airline and booking time. With the new exchange rate, fares are expected to rise further.
There are strong indications that international airfares, especially on the Nigerian routes, may skyrocket once again as the International Air Transport Association (IATA) has, on Wednesday, pegged $1 to N770.
Already, the inability of international airlines to repatriate their ticket sales for over a year has contributed to the high airfares on Nigerian routes.
On the average, a six-hour flight on economy ticket jumped from barely N400,000 in 2021 to about N1.2 million in 2022 and 2023.
In the same vein, business class ticket has jumped to between N4 million and N6 million during the same period, depending on the airline and time of booking.
The implications of the adjustment by IATA
With the new benchmark, a N1.2 million economy ticket may rise to N2 million and above, while for the business class, the fares may rise to N7 million or more.
As at 2021, a dollar was being accessed at the official rate of N444 for one dollar by airlines. But it jumped to over N577 to a dollar in 2022.
With the new regime and the harmonisation of exchange rate by the new administration, a dollar was sold at the black market on Tuesday at N702.
How Nigerian airlines are reacting to this development:
A source close to one of the foreign airlines operating into Nigeria confided in our correspondent on Tuesday that the new regime of N770 to one dollar would kick start today.
