Market News

BY Oyetunji Abioye

Airfare hikes by international airlines operating flights into Nigeria and other countries may be imminent as airport and air navigation services providers in the United Kingdom, South Africa, European Union, Ethiopia and United States have concluded plans to increase their charges by at least $2.3bn (N950bn).

As a result – the International Air Transport Association – the global body representing over 290 international carriers, has warned that the planned increases in charges by airports and air navigation service providers will stall post the COVID-19 recovery in air travel and damage international connectivity.

According to IATA, confirmed airport and ANSP charges increases have already reached $2.3bn (N950bn).

It said further increases could be 10 fold this number if proposals already tabled by airports and ANSPs were granted.

Speaking at the 77thn Annual General Meeting and World Air Transport Summit in Boston on Tuesday, the Director-General, IATA, Willie Walsh, said it was wrong for airports and air navigation services providers to increase their charges at a time the industry was seeking to recover from the devastating effects of COVID-19.

Walsh said, “A $2.3bn charges increase during this crisis is outrageous. We all want to put COVID-19 behind us. But placing the financial burden of a crisis of apocalyptic proportions on the backs of your customers, just because you can, is a commercial strategy that only a monopoly could dream up.

“At an absolute minimum, cost reduction – not charges increases – must be top of the agenda for every airport and ANSP. It is for their customer airlines.”

According to the IATA DG, a case in point is found among European air navigation service providers.

Walsh added, “Collectively, the ANSPs of the 29 Eurocontrol states, the majority of which are state owned, are looking to recoup almost $9.3bn (N3.84tn or €8bn) from airlines to cover revenues not realised in 2020/2021.

“They want to do this to recover the revenue and profits they missed when airlines were unable to fly during the pandemic. Moreover, they want to do this in addition to a 40 per cent increase planned for 2022 alone.”

Other examples, according to him, include: Heathrow Airport pushing to increase charges by over 90 per cent in 2022; Amsterdam Schiphol Airport requesting to increase charges by over 40 per cent over the next three years; Airports Company South Africa asking to increase charges by 38 per cent in 2022; NavCanada increasing charges by 30 per cent over five years; and Ethiopian ANSP raising charges by 35 per cent in 2021.

Consequently, the IATA boss warned of the danger of the planned increases in airport and air navigation charges by the airlines.

Although Walsh did not categorically disclose whether airlines will increase, experts believe carriers will push the costs to travelers.