The request by the House of Representatives to foreign airlines to reopen cheaper layers of fares for the Nigerian market while trapped funds are resolved has gone unanswered, much to the chagrin of international travellers this holiday season.
Even so, an increasing number of airlines are only offering premium fares to inbound tourists. Premiums in Economy and Business Class cabins are approximately 200 percent higher than average fares.
The implication is that a six-hour Economy Class ticket, which used to cost an average of N600,000 now costs N2 million and N3 million. Depending on the destination and airline, the Business Class variants range in price from N3.5 million to N5 million.
The country’s unusually high inventory levels have forced some Nigerians to forego travel this season or to purchase tickets from abroad (in foreign currency) at lower prices.
According to The Guardian, the protracted sorry state is not unrelated to the decline in naira-to-dollar value. Furthermore, there has been an interminable wait for the dollar equivalent for repatriation, while foreign airlines’ ticket sales (in naira) continue to accumulate.
The International Air Transport Association, the clearinghouse for over 290 global airlines, listed Nigeria as one of the top five markets with blocked funds from foreign airlines this week (excluding Venezuela). Nigeria is expected to receive $551 million, followed by Pakistan ($225 million), Bangladesh ($208 million), Lebanon ($144 million), and Algeria ($140 million).
Femi Gbajabiamila, Speaker of the House of Representatives, intervened in the stuck fund crisis involving the airlines, Ministry of Aviation, and the Central Bank of Nigeria in October (CBN). Gbajabiamila admitted that the inability to repatriate funds had serious ramifications for both Nigerian customers and their travel agencies.
In the future, the Speaker stated: “We need a two-way solution. On our part, we will find a way, by intervention or others, to have the funds released. While we are looking for that solution, I will also request the foreign airlines to exercise good faith by returning to the status quo (of affordable airfares) for the sake of your customers.”
However, a top official from one of the airlines told The Guardian yesterday that nothing has changed.
He explained: “The Speaker only gave a word of assurance that is yet to yield any result. More so, the CBN Governor has been speaking to the contrary, saying foreign airlines are not his priority. Sirika has also said foreign airlines can quit just like Emirates did. I think those are unfortunate comments to throw in the faces of your business partners.
“So, it will be difficult, if not impossible for any country manager to present mere words of assurance to the home country and expect positive feedback.
“Technically, we are still where we are, and that explains why we cannot open promotional inventories in Nigeria. It is a standard commercial practice; if your environment does not favour my investment, then I should keep my operation at the premium, to manage potential loss.”