Why Nigerian Air Fares Are High: B737 Flights Cost $9,000 to Operate

Nigeria’s domestic airlines face a severe structural sustainability crisis, operating on dangerously thin margins despite high air fares, according to a leading industry voice. Alexander Nwuba, President of the Aircraft Owners and Pilots Association of Nigeria (AOPAN), stated that public perception of price gouging is misleading. He warned that the current cost structure leaves carriers with “no room for error or equipment delays”.

The True Cost of Flying

Nwuba's comments came during an aviation town hall webinar in Lagos, titled, “High Air Fares – Are Airlines Really the Problem?”. He explained that current ticket prices are driven strictly by operational costs, not flight distance or time.

Aviation fuel is a major factor, accounting for approximately 38 per cent of operating costs, alongside aircraft leasing and maintenance. This has shifted the minimum sustainable ticket price upward.

A Boeing 737 flight between Lagos and Abuja costs about $9,000 to operate.
For a 162-seat configuration, the cost per seat ranges from N77,000 to N84,000.
For airlines to achieve financial sustainability, fares must exceed N100,000.

This reality means that any fare lower than this reflects a low-cost model that most Nigerian airlines cannot currently sustain.

Precarious Profit Margins

Industry data presented by Nwuba highlighted the precarious financial gap facing domestic operators. Average figures show that the cost per kilometre is N104, while revenue is only N112, leaving a narrow N8 profit per kilometre.

This minimal N8 margin means any operational shock quickly turns flights into losses. Such shocks include unexpected fuel spikes or an aircraft being grounded for maintenance. The structural cost base is extremely high, forcing airlines into a perpetual survival mode.

Impact of Declining Passenger Traffic

High air fares have directly impacted passenger trends and airline load factors. Domestic travel declined between 2022 and 2025, while international traffic remained stable or increased.

Data from the Federal Airports Authority of Nigeria (FAAN) confirms this trend. Domestic passenger traffic dropped by about 14 per cent between 2022 and 2024. The total domestic passenger movements fell from 14.52 million in 2022 to 12.54 million in 2024. This decline is attributed to air fares rising faster than real consumer incomes, causing domestic travellers to switch to road transport.

Seasonal travel patterns also create financial instability.

December flights to the South-East are often 95 per cent full outbound.
Return flights, however, average only 35 per cent occupancy.
This results in a combined 65 per cent load factor, which is below the break-even point.

This forces airlines to raise outbound fares to cover the empty return legs.

The Need for System Redesign

Nwuba identified reduced fleet size as a major contributor to high fares. Maintenance delays and financing constraints have shrunk the available fleet, raising operational costs by up to 20 per cent. Without sufficient scale, airlines cannot achieve the efficiencies required for truly affordable fares.

The financial environment is challenging. Airlines earn revenue in Naira but must pay for maintenance, spare parts, and insurance in US Dollars. Furthermore, Nigerian carriers face interest rates as high as 30% for financing, compared to 3-4% for European airlines.

To move forward, AOPAN recommends a system redesign focused on cost reduction. This includes: