International airfares on Nigerian routes have gone up further by over 20 per cent after foreign airlines raised the exchange rate for ticket sale from N462 per dollar to N551 per dollar.
International travellers on Nigerian routes have been paying higher airfares after carriers blocked their inventory of cheaper tickets in order to cushion the effects of the rising amount of trapped funds
The latest increase in the naira-dollar exchange rate for ticket sale by the International Air Transport Association, the Switzerland-based trade association of the world’s airlines, is expected to worsen the plight of Nigeria travellers who are already paying higher airfares.
Multiple travel companies confirmed to our correspondent on Friday that global distribution system companies had notified them of the latest increase.
They said the development was not unconnected with the difficulty faced by foreign carriers in repatriating their ticket sale proceeds out of Nigeria.
According to travel agents, the increase in the exchange rate has led to an over 20 per cent increase in international airfares.
“Virgin Atlantic which has a promo of about N800,000. This same promo is going for about N1.1m as a result of the increase in the exchange rate,” the chief executive officer of a travel agency, who chose to speak on condition of anonymity, said.
As of January this year, foreign airlines flying into Nigeria had about $743m in trapped funds in Nigeria. IATA has said Nigeria has the highest amount of foreign airlines’ trapped funds globally.
Stakeholders and travel firms have however emphasised the need for the Federal Government to direct the CBN to expedite the release of the trapped funds.
A former President of the National Association of Nigerian Travel Agents-the trade body for local travel agents-Mr Bankole Bernard, who also confirmed the latest increase in IATA’s exchange rate for ticket sales, said the Federal Government needed to honour the provisions of the Bilateral Air Services Agreement signed with foreign countries particularly as it affects the repatriation of funds.
“Today, the rate at which we are issuing tickets is N551 to a dollar. Is that the official rate? No, but that is the rate we are issuing tickets, which is moving closer to the black market rate. This means the issue of trapped funds would not have been if it had been properly managed,” he said
“The funds became trapped because we (the government) were not ready to give foreign airlines funds at the official rate. Why didn’t you tell them the rate you would give them funds so that they can sell their tickets at a particular rate as long as it is official? After all, we have multiple exchange rates. So, what will make this one different? Then, there will not be an issue of trapped funds and people will do their business and the agony travellers are facing will not be there.”