Nigerians are beginning to take hard decisions in order to cut costs. Some Nigerian travellers told Ipledge2Naija that they were beginning to fly through neighbouring airports in order to cut costs.
A businessman, Mr Joe Anakwe, said he recently moved to Ghana and flew from there to Dubai.
“Yes, it is cheaper, but it is also meant to have fewer hassles,” he said. Those countries do not have a dollar crisis like we do, and their flight costs are cheaper when compared with buying in naira,” he said.
Another Nigerian traveller, Charles Sawoe, noted that the forex challenges sometimes made the cost of flights higher by over 50 per cent in Nigeria.
“I have agents in Ghana and France. Those countries do not have issues with forex the way it is here. So, they buy tickets for me at cheaper rates. At times, I fly through Ghana, but sometimes I move through Lagos. But the most important thing for me is that I don’t normally buy tickets here the way I used to,” he said.
According to the president of the National Association of Nigeria Travel Agencies, Susan Akporiaye, Nigerians had started flying from Accra, Ghana, to London, Canada and other frequently visited destinations.
Speaking to Ipledge2Naija in a telephone interview, Akporiaye said, “Nigerians are already flying from Ghana to other countries because the lower inventories of tickets are no longer available in Nigeria. People go to Accra because Accra still has the lowest inventory available.
“By the time all airlines restrict sales to only the highest inventories like British Airways and Virgin Atlantic have done, then more people will move to Accra to fly,” she added.
Foreign airlines operating in Nigeria have since blocked all low ticket inventories on their websites, making it difficult for passengers to buy affordable tickets.
NANTA’s president said, “Yes it’s true because they get it cheaper that way, but you know even out of Nigeria, you get cheaper prices. It’s just that you have to issue the tickets out of Nigeria. For example, the restrictions on the lower fares happen just in Nigeria because of the forex crisis. It does not exist in Ghana, South Africa, London or the US. So, for instance, Virgin Atlantic is selling the highest economy at N1.7m for the Lagos-London-Lagos flight. You don’t even have to go to Accra even though Virgin Atlantic doesn’t fly from Accra. I’m just using that as an example. You don’t even have to go there to fly. All you have to do is get a travel agent in London who will see a lower fare of N500,000 plus, but I won’t see it. That N550,000 naira flight has been taken off for agents in Nigeria to issue. For agents in Nigeria, you can only issue the high one. So, I don’t even need to tell my customer to go to Accra or go to South Africa and fly, no. All I need to do is contact a colleague in London and he will get a cheaper fare. Once he gets it, I pay the person, he issues the ticket and my passenger can still fly from Lagos to London.
“So, yes, people are doing it but they really don’t have to. But then again, they forget that they also have to issue Nigeria to Accra and back except for people that live in Lagos and can go by road. But for us that live in Abuja and other parts of Nigeria, you have to issue tickets to Accra and back, so at the end of the day, what are you saving?
“Rather than fly to other West African countries, Nigerians aiming to travel can log in to the airline’s websites. Lower fares are on their websites and since they’re not based in Nigeria, payment will be made in the currency of the country, so that’s another way we can get lower fares as their website is domiciled in their countries.
“The only reason why they are not selling lower fares here is that they don’t want it to be sold in naira because their money is trapped here. So, as much as they can, they make the ones that we can sell in naira higher and then through their websites you can get lower ones, but you will pay in the currency of the country. They’re trying to get back some of their forex that is stuck in Nigeria so that it doesn’t keep increasing exponentially.
“They are business people and a lot of the things they do is in dollars. They pay FAAN in dollars, buy fuel in dollars, service their aircraft in dollars and meanwhile, a lot of the money is trapped here in naira. Even though it is in their accounts and not in the hands of the government, it’s of no use to them in naira. The money will only be of use to them if it is in dollars and that is where the problem is. We don’t have forex, so because of the dollar shortage, the government can’t convert their money for them. So, they are looking for a way to make sure that they get some things back. So, the person that is willing to pay N1.7m will pay in naira, so they’ll go and buy from the black market. But for those lower ones now, they cannot carry their money and go and buy from the black market, which will be a huge loss.
“The Nigerian government does not allow trade in any other currency except the naira but trade on the website of an airline is not considered illegitimate in Nigeria because that website is not domiciled here. So, you can’t say that they are selling dollars in Nigeria; it’s only when you go to their office physically or through a travel agency and you’re paying in dollars that they can have issues with the Nigerian government. On their websites, they can do anything they want to do.”
Ipledge2Naija, in the early hours of Thursday, reported that Emirates Airlines had announced the suspension of its flight operations in Nigeria from September 1, 2022. The airline said the suspension became necessary following its inability to repatriate its funds from Nigeria.
International carriers operating in Nigeria have repeatedly complained about their inability to repatriate funds to their home countries. They have raised this concern on many occasions with officials of the Federal Ministry of Aviation as well as those at the Ministry of Finance.
Blocked funds belonging to these airlines have risen to about $600m and this is due to the inability of the Central Bank of Nigeria to make the dollar available for the carriers to repatriate, operators say.
In its statement on Thursday, Emirates Airlines said it “has tried every avenue to address our ongoing challenges in repatriating funds from Nigeria, and we have made considerable efforts to initiate dialogue with the relevant authorities for their urgent intervention to help find a viable solution.
“Regrettably there has been no progress. Therefore, Emirates has taken the difficult decision to suspend all flights to and from Nigeria, effective September 1, 2022, to limit further losses and impact on our operational costs that continue to accumulate in the market.
“We sincerely regret the inconvenience caused to our customers, however, the circumstances are beyond our control at this stage. We will be working to help impacted customers make alternative travel arrangements wherever possible.”
“We remain keen to serve Nigeria, and our operations provide much-needed connectivity for Nigerian travellers, providing access to trade and tourism opportunities to Dubai, and to our broader network of over 130 destinations,” the global carrier stated.
Also, British Airways has already reduced its flight frequencies to Nigeria, as the airline informed its passengers last Thursday of an imminent hike in the cost of its flight tickets.
Reacting to this, the President, of the Association of Foreign Airlines and Representatives in Nigeria, Kingsley Nwokeoma, said more international carriers would join Emirates Airlines soon if nothing was done to address their concerns.
He said, “This is just the beginning. It is over $1 billion that is being held and they (foreign airlines) cannot repatriate it. If other countries are like Nigeria, there will not be any industry because this money is used for maintenance. Even the money used to pay their staff in Nigeria is coming from other climes.
“Aviation industry is all about 100 per cent safety. If there is no money, safety will not be 100 per cent guaranteed. So, it is going to continue. Emirates has kick-started it and I’m sure that you are aware that British Airways has cut flights into Nigeria and that is how it is going to start
Just like Emirates did, they will, first of all, cut their flights into Nigeria and they will look at it holistically again and if it is not working out, then it’s not working out. This did not start today. It started over the years and the government is not doing anything.”
In the same vein, the body of aviation professionals, Aviation Safety Round Table Initiative, expressed displeasure at the Federal Government of Nigeria while also stating that the Central Bank of Nigeria’s continued withhold¬ing of ticket sales of foreign airlines was having a negative effect on the image of the country.
ART advised the Federal Government to, as a matter of urgency, ensure the payment of the airlines in a bid to return normalcy to the aviation sector.
In a statement signed by the ART’s Assistant General Secretary, Mr Olumide Ohunayo, the body described as appalling the handling of the accumulated foreign airline funds trapped in Nigerian banks due to the non-allocation of forex to these airlines.
The statement read in part, ‘The Aviation Safety Round Table Initiative is dismayed by the appalling handling of the accumulated foreign airline funds trapped in our banks, due to the non-allocation of forex to these airlines.
“‘In all Bilateral Air Services Agreement, an Article in the agreement – transfer of earnings – clearly states that ‘each designated airline shall have the right to convert and remit to its country on demand, local revenues in excess of sums locally disbursed. Conversion and remittance shall be permitted without delay in accordance with the prevailing foreign exchange regulations.’
“International trade is bound by agreements which are sacrosanct and respected. Nigeria cannot do otherwise if we crave the attention of investors in our industry.
It’s important to state that foreign airlines sold these tickets at the official IATA rate and cannot be expected to go to the parallel market to source, convert and remit as opined in some quarters, the central bank should do the needful as enshrined in the BASA agreements.
“These funds should have been remitted at the official rate on the date of sale immediately the Airlines get clearance after paying all the local obligations including taxes.
“The damage that our action has done to the Nigerian image as an investment-friendly nation is far-reaching, while the citizenry is faced with high fares, reduced capacity and limited travelling options, which will worsen if we continue on this trajectory.
“We found ourselves in this unenviable situation because we lack the capacity to compete, which would have reduced the remittance volume.”