Foreign Airlines Hike Airfares Further as Nigeria Allegedly Reneges on Payment of Trapped Fund

Foreign airlines operating in Nigeria have hiked their fares.

Presently, standard economy return ticket sold in March this year at N300, 000 is now N1.7 million and airlines could charge as much as N1 million for change of date on ticket.

This, it was gathered was in reaction to the alleged failure of the federal government to pay in full the $265 million it promised out of $465 million trapped funds Nigeria owed the airlines.

On August 26, 2022, the Central Bank of Nigeria (CBN) said it had released the sum of $265 million to airlines operating in the country, to settle outstanding ticket sales in a bid to check a brewing crisis in the country’s aviation sector. The federal government had indicated that the sum of $230 million was released as special forex intervention while another sum of $35 million was released through Retail SMIS auction.

However, two weeks after, less than 50 per cent of the $265 million amount promised to be disbursed to airlines have been released, and some airlines have not received their money.

This was disclosed in a press conference on Thursday in Lagos, by the President of the National Association of Nigeria Travel Agencies (NANTA), Susan Akporiaye who said some airlines were yet to receive their money and some others have only received less than the monies they expected to receive from CBN from the release.

Akporiaye said the situation was creating trust issues between the federal government and the airlines, saying this was the reason some airlines still charge exorbitant fares.

“Sadly, that gesture instead of breathing a relief emboldened the foreign airlines to visit the Nigerian travelling public with most exploitative response in the name of protecting their business.

“As usual with them, their response which we could describe as ‘High Fare Pandemic’, is solely targeted at Nigeria and Nigerians, and cannot be seen anywhere in Africa even in countries where they also have their funds being trapped.

“It is sad that Nigerians have to buy tickets to the tune of N3 million to N4 million and be charged as high as N1 million to change travel dates even on tickets bought before this problem began.

“This is unacceptable, exploitative, and hostile to the survival of Nigerian aviation downstream sector and to which we call for sanity and return to the best inventory practices and deployment,” NANTA President said.
She said the delay in repatriation of funds of foreign airlines in the country assumed an embarrassing scenario when International Air Transport Association (IATA) labelled the country a debt-bearing nation, which was like stigmatisation.

“In between these strangulating circumstances, the airlines withdrew lower inventories across board, selling at the highest possible openings as way to cushion their trapped funds.

“Amid the challenges and exorbitant option for our clients and other travelling public not excluding the threat to job losses and closure of shops by most of our members, we held on to optimism that our government would respond,” she said.

The NANTA President said if no improvement was recorded between now and December, many travel agents, which are over 6,000 in number, may close shop and estimated three million workers and ancillary labour would lose their jobs.

“Travel agents use Global Distribution System and inventories were blocked on that platform and airline offices cannot even issue. Those that have not closed inventories are restricting sales to highest ticket inventories and this has affected sales by travel agents.

“Currently several travel agents are out of job. There is a projection that if this continues, over three million direct and indirect jobs will be lost. These are jobs related to travel which include hotels, shops around the airport, ground handlers, travel agents, cleaners, tourists, photographers and canteens amongst others,” Akporiaye explained.

She said the action of the airlines was also constricting in-bound tourism, which could further lead to loss of jobs.

“We appreciate the response to the release of some funds, we urge government as a matter of urgency to open further windows of engagement and calling for a meeting with all parties involved; to include CBN, Minister of Aviation, Minister of Finance, Foreign Airlines, the Nigeria Civil Aviation Authority and IATA,” she said.

Chinedu Eze

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