•Cheapest ticket now N800,000
By Chinelo Obogo, [email protected]
Despite confirmation from the Central Bank of Nigeria (CBN) that it recently disbursed $61.64 million to foreign airlines in Nigeria in a bid to clear forex obligations and stabilise the market, the high cost of air tickets for international travel has persisted.
The apex bank had this week released $61.64 million outstanding forex obligations to foreign airlines that sold tickets in naira but have not been able to repatriate such funds due to forex scarcity. Foreign airlines were hiterto owed more than $700 million as at last November. The issue of international airlines being unable to repatriate funds from sale of flight tickets had persisted but worsened in the last quarter of 2023. This caused foreign airlines to block their lower inventories to Nigerian travelers, thus skyrocketting the cost of flight. The International Air Transport Association (IATA) said the inability of international airlines to repatriate their ticket sales for over a year have contributed to the high airfares on Nigerian routes.
But following the release of some portion of the funds to foreign airlines, President of the National Association of Nigeria Travel Agencies (NANTA), Susan Akporiaye, told Daily Sun that there has been no significant respite for Nigerian travelers as the cost of tickets for international travel remains high due to forex challenges. She explained that even if the apex bank releases 50 percent of the trapped funds, the cost of flight tickets would not return to pre-2023 levels because the airlines use the ‘Importers and Exporters’ window for their transactions with rates always fluctuating.
“We have to look at it holistically. Our trapped funds was over $700 million and what they have gotten is $61 million, which is not up to 50 percent and that is probably why nothing has changed. If they had at least gotten up to 50 per cent of their trapped funds, maybe there would have been a considerable change, but so far, nothing much has changed.
“But then again, there are two things involved when it comes to the issue of the price of tickets; the inventory sales when the tickets are not available for sale and there is also the issue of foreign exchange. Even when all the airlines release their inventories, it is still not going to be cheap. For instance, Turkish Airline has released all the classes of their tickets but it is still not cheap because a $500 ticket is over N600,000, unlike before when a $500 ticket was N250,000. Before, a $1,000 ticket cost between N500,000 to N600,000 but now, the same is about N1.1 million.
“The airlines use the ‘I and E’ window for their transaction and the rates are always fluctuating. There is nothing like official rate anymore. On Tuesday, it was N1, 185 and on Wednesday, it was N1,251 and at a one point, it increased to N1,385. The ‘I and E’ window is a daily rate and we get the rate daily. On Wednesday, you get the rate for Thursday and if it is going to be higher, we advise our clients who have pending bookings to get their tickets immediately because the price is about to increase. There are sometimes that the prices come down and when that happens, we also advise our clients to wait a while so that they can get it cheaper. But in all, the rate has never gone below one thousand dollars since the ‘I and E’ window started in September last year.
“Even if the CBN pays them 50 per cent of the trapped funds and all the airlines release their lower inventories, let us not celebrate too much because it will still not be as cheap as people expect it to be because of the exchange rate. Before, Turkish Airline was selling only the highest economy ticket which was between N2.7 and N3.5 million depending on the destination, but now, because they have released all their inventories, you can now get a ticket at N1.2 million. You can also get at N900,000 and N850,000. When people talk about cheap tickets, they are probably looking at last year’s rate when you could get tickets at N500,000 or N600,000 but you can’t get any ticket at that amount again, the cheapest you can get is N800,000,” she said.