By Chinelo Obogo
National Association of Nigeria Travel Agencies (NANTA) has said that Nigeria’s travel market has lost about $500 million due to exploitation by foreign airlines.
NANTA, which is the umbrella body of all travel agencies operating in Nigeria, said that unless the government intervenes and ‘put its foot down’, foreign airlines will continue exploiting Nigerians.
Speaking at a press conference in Lagos on Friday, NANTA’s president, Susan Akporiaye, saidthe travel market contributes billions to Nigeria’s economy and that if these issues are not resolved, it will create more problems as the sector has already lost between $450 and $500m including 720,000 job losses in 2022 alone.
Foreign airlines have in the past months stopped selling lower inventory tickets due to the inability of repatriate funds generated from sale of tickets in Nigeria.
Akporiaye said: “As we speak, it is only in Nigeria that a traveler is made to cough out over two thousand dollars for an economy ticket and also change the date of the flight itinerary for whatever personal reasons with about 1.5 to 1.8 million naira.
“To put this in perspective, all low-fare inventories of the airlines have been deliberately blocked to our members and to this market. Airlines, even after various engagements as partners, have seem not to take such relationship or business history with NANTA into consideration, rather have gone ahead to make the market extremely difficult for members and in effect expensive for travelers.
“This now means, Nigeria is at a disadvantage since the airlines seems to have mastered the art of exploiting the forex issue to their advantage. Agencies are now forced to fold, leave the country or trying to use other neighboring countries to sell to their customers. Nigeria Travel market continues to be at the losing end with the airlines being indifferent to the plight of travelers and as a body we are left with no option than to call on the government to be more strategic, deliberate and direct in resolving this multifaceted dilemma.
“Just to be clear, in the aviation downstream sector, businesses are currently folding up and more will follow suit which will add to the unemployment challenge that the Federal Government is wrestling with if urgent and precise actions are not taken to nip this development in the bud before it is too late.
When we gathered with you during the 3rd quarter of 2022, we told you that trapped funds of Airlines maybe responsible for the reactions of few foreign Airlines then, which made trading on their inventory difficult and unbearably expensive. Today, the story has changed completely; the reaction of airlines is grossly unfair to the Nigerian travelling public, as well to us as a nation in general with a seeming disdain to the available cordial business relationship. This of course gravely threatens our survival as travel practitioners in Nigeria. The suffocating profiteering practices by majority of the foreign airlines is unbelievable and unexplainable in a Nigeria market that is ranked by many indices of IATA as one of the best in Africa and with the best post-covid recovery rates across Africa and Middle East, the Nigerian Market should be applauded, but the reverse is the case.
“For emphasis, being one of the biggest market for any airline that operates within it, we expect airlines to respect and appreciate the impact of the traffic our market offers and seek better ways to ensure there is mutual benefit in tandem with the current reality. The trade rules are obnoxious, not consistent with global best practices and fares are unjustifiably high, all in reaction to trapped funds. We at this stage have reasons to believe there is more to it.
“Nigeria travel trade professionals are at crossroads with no help from the Federal Government either through the Central Bank of Nigeria or the Ministry of Aviation to addressing these challenges and finding solutions. We hold the stand that government still retains the responsibility to commit to agreements with airlines to protect the sector and call airlines to order when there are obvious excesses from the airlines that puts the entire industry in jeopardy; because the current fare structure and practices are exploitative to the Nigerian Traveler as well as agencies who provides a reasonable number of jobs for our great nation.
“We strongly request, the airlines to open inventories to tally with what obtains in similar markets. From all indications, the well-publicised open revelation by the CBN Governor last year on the graduated payments on trapped funds to which foreign airlines received forex to aid repatriation of their funds did not help. On the established facts and premise that the airlines, after the CBN intervention, nosed down hard on Nigeria travelling public and trade professionals, with a mixture of harsh rules and further fare hikes instead of a return to normal business operations. Their action is frustrating sales within the Nigerian space while still leveraging on the high volume the nation provides.
“To add, the National Assembly also heard our cry and called for a peaceful resolution of the trapped funds impasse. Save for initial adjustments by one or two airlines, no significant impact was achieved as airlines continue with even higher fares as though they determine what happens in Nigeria. Today, a willing prospective Nigerian traveler needs about N3,000,000.00 to purchase an economy ticket while date changes on some airlines go as high as between N1,500,000.00 to N1,800,000.00. This has crippled our businesses, drove our clients away, and made Nigerians to travel across our borders at huge security risk to connect cheaper flights.
” Our questions are: At what point will this stop, and at what point will government deploy its instruments of governance to call the sector to order? What is the cost of trapped funds to airlines? Do the costs equate to the extreme fare hikes that are exclusive to this market? Will extreme fares of airlines and resultant increased revenue (at no additional cost) not place future compound burden on the forex reserve of government?
” Serious questions need to be asked around these actions, because the more airlines generate, the more they claim for repatriation, and the pile of trapped funds grows. We have, through official channels and private contacts, reached out to the airlines but they give reasons that do not convince us. The fares and practices are strangulating, and our Nigerian regulation is not deployed.
“No power or authority in Nigeria is presently holding back the rampaging practices of Airlines and we regret to say that NANTA members are not protected by government in this circumstance, neither is the Nigerian travelling public. We recommend that the government encourages and go into strategic partnership with indigenous airlines to explore more international routes so as to create the competitive environment that discourages undue advantage and encourages true market forces to regulate the cost of air fares for Nigerians.
“We as a body would gladly work with the committee set up to finetune how this will operate as we give our on-field experience to enable our nation gain the best out of it. This we will commit to if the foreign airlines insist on getting us out of business. We will gladly engage with government and other stakeholders as to know how to birth this while ensuring foreign airlines get their funds too.
“We, at NANTA, are pained, anxious, and worried; we cannot over-emphasize the consequences of job losses, the security risks to Nigerians travelling across borders to connect cheaper flights, and the shame of a parallel dollar monetary policy in the travel sector, against established national naira monetary policy. We are also worried that none of our political parties have deemed it necessary to look at aviation economics, particularly and on its homogeneous socioeconomic and security opportunities and how it should be made more responsive and efficient to making Nigeria proud on the international aviation scene. On our part, we advise the new Government to follow up keenly on Bilateral Air services Agreement (BASA) and other extant aviation laws which will open our economy to serious local and foreign investors. We also remain available for consultation.”