The National Bureau of Statistics' Transport Fare Watch report shows the average airfare for a specified domestic route in Nigeria rose to ₦81,334.05 in November 2023, an increase of 11.01 percent compared with ₦73,270.27 in the same month a year earlier, and 3.24 percent higher than the October 2023 figure. The report attributes the increase to elevated aviation fuel prices and continued scarcity of foreign exchange, both of which have driven up airlines' operating costs through the year.

The rise in airfares follows two of the defining policy shifts of 2023: President Bola Tinubu's removal of the petrol subsidy on his inauguration day in May, and the subsequent liberalisation of the naira's exchange rate, both of which raised the naira cost of imported Jet A1 and of servicing dollar-denominated aircraft leases and maintenance contracts.

Airlines Say Fares Have Not Kept Pace With Costs

Domestic carriers have consistently argued that fare increases through the year have lagged the actual rise in their input costs, particularly fuel, which typically accounts for a large share of an airline's operating budget. Airline Operators of Nigeria representatives have repeatedly pressed the federal government and fuel marketers for relief, including calls for a review of taxes and charges levied on aviation fuel imports.

Transport costs more broadly have become one of the most visible symptoms of Nigeria's 2023 economic reforms. The NBS report notes that even as air travel became markedly more expensive, other categories of transport fares moved in different directions during the same month, reflecting the uneven way the subsidy removal and currency float rippled through different parts of the economy.

A Squeeze With No Clear End in Sight

With the naira continuing to trade well below its pre-reform value against the dollar into the final weeks of 2023, industry observers expect further fare increases in the coming months unless the federal government intervenes with fuel-cost relief or airlines find room to improve capacity utilisation on their busiest routes.