•More passengers dump Europe, US for Rwanda, Kenya, others By Chinelo Obogo [email protected] 07064781119
•More passengers dump Europe, US for Rwanda, Kenya, others
By Chinelo Obogo [email protected] 07064781119
Nigeria’s travel agents have revealed how African airlines have continued to stand in solidarity with the country in the face of the resolution of European airlines to block lower flight inventories, causing an astronomical increase in the cost of air ticekts.
For over two years, many foreign airlines operating in Nigeria shut down their lower inventories because they have been unable to repatriate millions of dollars generated from ticket sales now trapped in the country’s banks.
The International Air Transport Association (IATA) said the international airlines failed to repatriate their ticket sales for over a year and the blocked funds have contributed to the high airfares on Nigerian routes.
Last month, IATA said that blocked funds belonging to foreign airlines trapped in Nigeria had hit $812.2 million, warning that rapidly rising levels of blocked funds are a threat to airline connectivity in the affected markets. The international airlines blocked funds have increased by 47 per cent to $2.27 billion in April 2023 from $1.55 billion in April 2022.
The top five countries that account for 68.0 per cent of blocked funds are Nigeria with the highest trapped funds ($812.2 million), Bangladesh ($214.1 million), Algeria ($196.3 million), Pakistan ($188.2 million), Lebanon ($141.2 million).
IATA’s Director General, Willie Walsh said, “Airlines cannot continue to offer services in markets where they are unable to repatriate the revenues arising from their commercial activities in those markets. Governments need to work with industry to resolve this situation so airlines can continue to provide the connectivity that is vital to driving economic activity and job creation.”
The vice president of the National Association of Nigeria Travel Agencies (NANTA), Yinka Folami, told Daily Sun, that the cost of international flights from Nigeria is dependent on what the cost of the dollar is at the I and E window at every given time.
“A while ago, naira sold for N680 to one dollar and yesterday it sold for over N700. The foreign airlines then fix the prices based on what is available from the Central Bank of Nigeria (CBN). However, despite our repeated pleas, foreign airlines have adamantly refused to unblock lower inventories and it is making the cost of tickets very expensive,” he said.
An economy class ticket from Lagos to France on British Airways now cost about N1.92 million, while Lagos to London cost about N2.15million and the president of NANTA, Susan Akporiaye, told Daily Sun that this development has reduced passenger traffic to European countries as more Nigerians are now opting to travel to African destinations for their summer vacation.
“There has been no improvement so far in the pricing of international flight tickets because the foreign airlines are saying that they have still been unable to repatriate their funds from Nigeria. But we would be having a meeting with foreign airlines next week over the matter.
“The exchange rate has really affected sales badly because the cost of international flights have increased drastically. You cannot compare when you used to sell tickets at N450 to one dollar to when you now sell tickets at N750. It is affecting sales. A lot of people have had to cancel their travels and they now travel based on necessity. A particular airline has released some of their low inventory, not all, so you can get an economy ticket to London for N1.5 million but even at that, it is still not cheap.
“The good thing is that the African airlines don’t have issues and in a way, it is encouraging more Nigerians to travel to Africa for vacation. To travel to South Africa for instance, is about N400,000 and more Nigerians are opting for African destinations for vacation instead of going to Europe or US because the African airlines didn’t join European airlines is blocking their lower inventories, so their prices are still good and affordable. So, I advise some of my clients who usually prefer going to Europe or US for vacation, to rather go to African destinations. Why would a family of four spend over five million naira on ticket alone just because they want to go on vacation to Europe when they can spend less than half of that to go to any African country and get the same experience?
“So, unless it is very important that you have to travel to Europe, maybe for schooling or business or health concerns, more and more Nigerians are opting for African destinations like Rwanda, Egypt or South Africa. In the past, when your child is going to study abroad, the father or mother may want to go with the child, but now, the child usually goes alone because of the high cost of flight tickets.
“African airlines that fly from Nigeria to the US or Europe still have their low inventories unlike European airlines but the rate of exchange is not making it that cheap. You could get African airlines to London for N400, 000 but because of the exchange rate, it is now about N800, 000 which is still far cheaper than European airlines. I think what is happening is that African airlines are showing solidarity to Nigeria because they can’t be behaving like the European airlines. When things finally settle down, people who are now going to countries like South Africa for instance, won’t want to stop. So this is an advantage for Africa’s tourism,” she said.
sunnewsonline.com