Despite $300m trapped funds, airlines increase flights into Nigeria
Despite foreign airlines’ $300 million trapped funds in Nigeria, the number of flights coming into the country is increasing as the travel market continues to grow, BusinessDay has learnt.
Airlines have in the last four months been unable to access their funds from tickets sold in the country as a result of foreign exchange scarcity and have resorted to buying dollars from the parallel market at the rate of N580 per dollar as against the Central Bank of Nigeria’s rate of N418 per dollar.
“Despite the blocked funds, airlines do not see this as a problem to stop them from operating in Nigeria. In fact, airlines are currently carrying full load in and out of Nigeria and are gradually returning to pre-COVID era,” said Bankole Bernard, group managing director at Finchglow Group Nigeria, and former president of National Association of Nigeria Travel Agencies (NANTA).
According to him, the airlines understand that funds are not coming into the country’s coffers because of slow sales in crude oil and are hopeful that their funds will soon be released.
“The travel agents in Nigeria together sell one billion dollars’ worth of tickets annually. The travel market is fast growing. The travel agents are currently doing about 85 percent of what they were doing pre-COVID era. So, almost all airlines want to come into Nigeria. Nigeria is the next big travel destination,” he said.
He said with summer approaching, bookings to London, Dubai and Canada had increased.
Data from the National Bureau of Statistics showed that a total of 15,225,627 travellers passed through Nigeria’s airports in 2021, showing a combined growth of 101.02 percent in domestic and international travel.
The data showed that the total number of international passengers who passed through Nigerian airports was 2,219,146, up from 1,408,026 passengers in 2020. This represents 57.61 percent growth rate.
In 2021, the total number of domestic passengers who passed through Nigerian airports was 13,006,481 as against 9,069,295 in 2020, representing a 43.41 percent growth rate.
In 2016, when airlines’ funds were blocked in Nigeria, many airlines reduced frequency into the country while United Airlines and Iberia Airlines suspended flights into Nigeria.
British Airways has returned its flights to pre-COVID levels of seven weekly return flights from Lagos and seven weekly return flights from Abuja.
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Qatar Airways recently commenced Kano and Port Harcourt flights, doubling its network to Nigeria. It also increased its Lagos flights to two and Abuja to a daily flight.
In addition to Lagos and Abuja daily flights, Ethiopian Airlines has resumed its Enugu, Kano and Port Harcourt operations.
Royal Air Maroc, the Northern African carrier, is planning to expand operations beyond Lagos.
Susan Akporiaye, president of NANTA, told BusinessDay that to cushion the effect of the current dollar scarcity on their operations, airlines have stopped sales of their lower inventories, making passengers pay more on higher classes of tickets available on airlines’ websites.
According to Akporiaye, while airlines sell tickets at the rate of N444 to a dollar on their websites, they source for dollars in the parallel market at a rate of N550-N580 to a dollar.
To enable these airlines to make some profits, they shut down sales of lower ticket classes and only sell higher ticket classes.
Investigations by BusinessDay show that an economy class Lagos-London return ticket, which was sold for an average of N500,000, now cost about N800,000.
Also, a Lagos-London return ticket, which was sold for an average of N450,000, now cost about N650,000
Frequently visited US destinations are also seeing an increase in ticket price. A Lagos-US return ticket, which used to go for an average of N650,000, now cost about N850,000.
The NANTA president said despite the high ticket fares, summer still looks good as most flights for summer are almost fully booked following the decisions of many countries to open up for travel after COVID-19 lockdown.
