Friday, 27 June 2014

Aviation expert faults crash in airfares, warns NCAA

The Sabre Travel Network, an aviation service provider on Thursday warned the Nigerian Civil Aviation Authority, to be wary of recent reduction in airfares by some domestic airlines.
The President of STN, West Africa, Mr Gbenga Olowo, told the News Agency of Nigeria in Lagos that passengers were more interested in their safety rather than airfare slashes.
NAN reports that airfares in the sector had dropped in the last few months by 60 per cent in the local scene as a result of new entrants into the sub-sector.
An hour flight between Lagos and Abuja now goes as low as N10, 656 and N18, 000, depending on the time of booking and the airline a passenger is purchasing the ticket from.
Earlier in the previous week, Dana Air announced a starting price of N9,000 on all its routes, while other airlines like Med-View, Aero and FirstNation have followed suit.
Olowo said he was surprised at the sudden crash of airfares ranging from N7, 000 to N15, 000 an hour.
He attributed the airfare slashes to the emergence of new airlines in the sub-sector, saying it was a bad strategy adopted by the airlines to penetrate the market.

Olowo recalled that as of 1994, an hour flight was around $100 (about N17, 000).
He wondered why airfares should be cheaper 20 years later in spite of the inflation that had crept into the system over the years.
He said, “I read with shock that a one hour tariff will be selling for between N7, 000 and N15, 000 due to the emergence of new airlines and competition in the market.
“Beyond the misconception of being capitalist, this should worry Nigerians and the regulator.
“With authority, I submit that this is not a sensible market penetration strategy, but a confirmation of cash flow problem and survival need. A one hour flight in 1994 was $100. How could it come cheaper 20 years after given all environmental and market considerations?”

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