Still rising: Airfares increase in Nigeria

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Airfares in Nigeria have increased by 57% over the past year. According to the National Bureau of Statistics (NBS), the airfare for specified routes on a single journey in September 2024 rose by over ₦45,000 compared to the same period in 2023.

This increase has been attributed to fluctuations in aviation fuel prices and exchange rate volatility, leading to rising operational costs. 

Higher airfares in Nigeria have several implications: elevated travel costs for consumers, decreased demand for air travel, adverse effects on tourism, increased operational costs for businesses that depend on air transport and inflationary pressures on related sectors such as hospitality and logistics.

Across Africa, a similar trend is evident in the demand and aeroplane seat availability data. Overall, the number of aeroplane seats in Africa decreased by 3.58%, suggesting a reduction in available flights.

Demand for aeroplane seats varies across Africa, with significant drops reported in Eastern and North Africa, while Southern Africa saw an increase in seat capacity. 

The “Seats by Region” metric represents the number of seats available to, from, and within each African subregion for the specified period. 

Uneven seat distribution could be due to factors like demand elasticity, operational challenges, and regional economic conditions, which airlines are addressing by strategically adjusting capacities to align with market demand.

Fuel Costs, Exchange rate, and Airfare Correlation

Data between September 2023 and March 2024 indicate a 71% correlation between airfare charges and aviation fuel costs. 

This shows that there is a moderate to strong positive connection between the two variables, indicating that domestic flight costs tend to climb in tandem with increases in aviation fuel prices, as airlines likely pass some of these increased expenses onto consumers.

The depreciation of the Naira against major foreign currencies was another reason stated to have led to the increase in airfares in Nigeria.