The alleged move by foreign airlines operating in Nigeria to sell tickets in dollars is generating ripples in the aviation industry, Daily Trust can report.
This is coming as pressure mounts on the Federal Government to clear the backlog of trapped funds by foreign airlines which has grown by about 100 percent in the space of one year.
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From $147m in August, 2021, the foreign airlines’ trapped fund in Nigeria has hit $283m (N117bn) with some foreign airlines allegedly now issuing their tickets in dollars which is against the bilateral air service agreement (BASA) which compels them to sell tickets in the local currency.
APG Interline Electronic Ticketing Agreements (IET) Network with over 200 airline partners had reportedly issued a notice to its trade partners and travel agencies to start issuing tickets in dollars with effect from April 19.
Daily Trust reports that the network allows travel agencies to ticket a wide range of airlines not present on their local Billing Settlement Platform (BSP) and flight combinations with airlines where no interline agreements exist.
Some of the carriers on the APG Network are Turkish Airlines, South African Airways, FlyDubai, Kenya Airways, Middle East Airlines, Royal Air Maroc, Rwandair, Egypt Air, ASKY, Air Seychelles, Air Algerie, Air Namibia, among others.
APG in its travel advisory entitled, APG IET: Restrictions of Sales in US Dollars, says, “Dear travel partners, warm greetings from APG. This is to bring to your notice that with effect from April 19, 2022, GP would only accept issuing of tickets in US dollars and not Naira. This is mainly due to repatriation issues and the forex situation in the country.
“This would most likely be a temporary measure till the Forex situation improves. Our sincere apologies for any inconveniences this may cause to you and your business. Thank you for understanding”.
However, hours later, the APG-IET recalled the notice while rescinding its decision to issue tickets in dollars.
The fresh notice issued to its trade partners on Thursday read: “This serves to recall and cancel the notice we sent out yesterday, the 13th April 2022. Kindly disregard the said notice. Sales will be continued in the Nigerian Naira. We regret any confusion the earlier notice may have caused.”
Travel agencies deny dollar ticket sale
Speaking with Daily Trust, President of the National Association of Nigerian Travel Agencies (NANTA), Mrs Susan Akporiaye said the report about airlines issuing tickets in dollars is false.
According to her, the APG is not an airline and cannot dictate to any airline as such would be tantamount to putting the airlines in trouble as it is against the BASA to sell tickets in dollars.
“Airlines that sell in dollars are liable to be sanctioned by the Central Bank of Nigeria (CBN),” she said, adding that as far as NANTA is concerned, no airline has sent any notice to start issuing tickets in dollars.
Air fares on the rise
As the funds remain stuck in Nigeria, findings by Daily Trust revealed that some airlines have devised strategies for survival by cancelling the cheapest fares on their website.
Daily Trust reports that airlines have different fare categories on their booking inventory from the lowest fares to the highest.
For instance, before now passengers can get as low as N200,000 for a flight to either Dubai or Addis Ababa.
Checks yesterday indicated that a one-way ticket from Lagos to Dubai, United Arab Emirates (UAE) on Emirates cost as much as N439,899. A Lagos-Addis Ababa flight on Ethiopian Airlines cost N405,261.
A travel agent who explained the development said airlines had cancelled the cheapest economy fares on their website.
“What you see now is premium Economy which is far more expensive than the Economy ticket we are used to and by this, the airlines can make more money to be converted to dollars at the black market,” the source said.
As at yesterday, one dollar was exchanged for N585 on the black market. The NANTA President however appealed to the federal government to address the concern of foreign airlines in the spirit of the bilateral air service agreements.
She said, “Yes what the airlines are doing which is not new is the fact that because they have to source their funds in the black market, they are not selling their lower inventories. They are only selling the higher ones.”
She however said the trapped foreign airlines’ funds remain a cause of concern in the industry.
“Nigeria government is not allowing them to repatriate their funds, they are already going against the BASA. These are foreign airlines. So they need to repatriate.”
Also speaking, aviation analyst, Olumide Ohunayo said the problem had happened with countries facing a financial crisis and high inflation rates.
“It has happened in Venezuela, it happened in Iraq, Zimbabwe, Sudan, even Thailand during its financial crisis. So many countries have experienced it.”
The federal government under Muhammadu Buhari’s administration had 2018 cleared the blocked funds to the tune of over $600 million.
Minister of Aviation, Senator Hadi Sirika recently appealed to President Buhari to prevail on the Central Bank of Nigeria (CBN) to prioritise foreign exchange allocation to the airlines to clear the backlog which has grown.
“Nigeria currently holds $283m of foreign airlines funds blocked in the country.”
