It is now a tough struggle for Nigerians traveling abroad as many struggle to meet up with rising airfares with the volatile foreign exchange rates that followed the floating of the naira.
Many of the passengers have now resorted to booking and paying for their oversea trips in neighbouring countries including Ghana, Benin and Republic of Togo where lower fares are obtainable.
According to The Nation, the fares on international routes from Nigeria have been on the rise over the last few months.
The situation was made worse since the introduction of the single forex market and the depreciation of the naira brought about by the cancellation of the parallel forex market..
Most hit by the development are flights to Europe, Middle East and the United States.
Passenger traffic, which usually peaks on the approach of summer, has dipped considerably owing to the rising airfares.
International airfares are often denominated in the US Dollars.
A passenger who spoke on conditions of anonymity said the situation has forced many intending travellers to weigh their options before embarking on any trip.
The global airlines body International Air Transport Association (IATA) said, last week, that the increase in fares was inevitable since they are denominated in dollars and converted into the local currency, for sale in the Nigerian market.
These conversions, IATA said, use the official prevailing exchange rate provided by the country’s financial system.
These conversions, IATA said, use the official prevailing exchange rate provided by the country’s financial system.
“IATA simply applies the spot rate at which the Central Bank of Nigeria sells USD through banks to the market, at its fortnightly retail foreign exchange auctions,” it said.
“The rate is not static. If the rate at which the CBN sells US Dollars goes up, the exchange rate applied to airfares will follow and vice versa.”
Under the new dispensation, a Lagos/London return trip now attracts an average of N1.4million,according to the booking inventory by a travel management company.
A July 2,2023 booking for direct flight costs N1.2 million for a direct flight.
A direct/ transit/ connecting flight on Royal Dutch KLM Airlines on the same day goes for N1.3 million.
On Air France, booking for the same date for direct flight costs N1.4 million. Transit/connecting flight on the Lagos/London route is going for N3.4 million.
On Lufthansa German Airlines, booking for the same date on direct routing is going for N1.5 million. Connecting / transit flights are going for the same amount.
On Ethiopian Airlines, booking for direct flights on the same destination is going for N1.5 million.
Connecting / transit flights on the same destination is going for N1.6 million.
Booking options to Dubai,UAE, a favourite destination for many Nigerian travellers, offer intriguing rates.
Direct booking on Ethiopian Airlines for July 2, 2023 is N1.2 million while transit / connecting flights for the same routes for July 2, 2023 has on offer a fare structure of N1.6 million.
On Qatar Airways, booking for the same travel date is offering a fare regime of N1.8 million for direct routing. Connecting/ transit flights for the same date present same fare.
For travels to continental United States- Lagos / New York for July 2, 2023 the fare offering on Royal Air Maroc is going for N1.6 million, Ethiopian Airlines N1.9 million, Air France N2.5 million, Delta Airlines N2.5 million and Kenya Airways N2.7 million; which are on direct routing regime.
Foreign carriers say they currently have over $812.2 million from ticket sales trapped in Nigeria.
Nigeria is ahead of Bangladesh with $214.1 million, Algeria with $196.3 million, Pakistan with $188.2 million and Lebanon trailing fifth with $141.2 million.
IATA’s Director General and Chief Executive Officer, Willie Walsh, said at the recent Annual General Meeting & World Transport Summit of the world’s airline body in Istanbul, Turkey, that rapidly rising levels of blocked funds constituted a threat to airline connectivity in the affected markets.
The industry’s blocked funds , Walsh said, increased by 47 percent to $2.27 billion in April 2023 from $1.55 billion in April 2022.
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.”
IATA urged governments to abide by international agreements and treaty obligations to enable airlines to repatriate these funds arising from the sale of tickets, cargo space, and other activities.
Speaking on the development, an industry analyst and Head, Strategy, Zenith Travels, Mr Olumide Ohunayo, said international fares out of Nigeria were on the rise because of Nigerian carriers’ inability to compete on international routes.
According to him, foreign carriers, having suffered from the trapped funds and based on the international trade agreement to remit revenue at the time of sales of tickets have lost money to the new rate of exchange.
He said: “Except there is compliance with that condition, higher fares will continue on Nigerian routes.The consequence of this is that travel agencies are losing patronage, which could get worse, triggering loss of jobs. Intriguingly, many passengers are running to neighbouring countries , or friends and relatives abroad who could buy tickets for them directly with dollars or other foreign currencies on the website and send for their people to travel.
“These are the factors that affect passenger traffic in and out of Nigeria due to high naira rates for the air tickets. If you have dollars, it is cheaper to procure tickets than if you are looking at purchasing it in naira. Majority of Nigerians would have to use naira, this presents a downside to the development. The Nigerian market is peculiar , because of our penchant for travel and inability to analyse the market and reverse it to our advantage.
Significantly, travel out of the country from the Lagos and Abuja axis is huge for first class and business class , which is building up irrespective of the fares.
“The only way we could bring this down , given that these foreign carriers are the only ones dominant on the routes , will trigger demand and supply disruptions.
“The lower demand for travel now is only on economy fares and private travel.”
On the way out of the crisis,Ohunayo canvassed increased capacity on international routes for Nigerian airlines either as flag carriers or national carriers must join the fray for partnership . “It is only at such points or conditions that air fares could witness some significant reduction.”
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