International airfares on Nigerian routes have gone up further by over 20 per cent after overseas airlines raised the alternate fee for ticket sale from N462 per dollar to N551 per dollar, findings by The have revealed
International. travellers on Nigerian routes have been paying greater airfares after carriers blocked their inventory of cheaper tickets in order to cushion the effects of the rising amount of trapped funds
The newest increase in the naira-dollar alternate fee for ticket sale by the International Air Transport Association, the Switzerland-based trade organization of the world’s airlines, is anticipated to worsen the plight of Nigeria travellers who are already paying greater airfares
Multiple. tour corporations confirmed to our correspondent on Friday that global distribution system corporations had notified them of the newest increase
They. mentioned the development was not unconnected with the problem confronted by overseas carriers in repatriating their ticket sale proceeds out of Nigeria
According. to tour agents, the increase in the alternate fee 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 N11m. as a consequence of the increase in the alternate rate,” the chief govt officer of a tour agency, who selected to speak on condition of anonymity, said
As. of January this year, overseas airlines flying into Nigeria had about $743m in trapped funds in Nigeria. IATA has mentioned Nigeria has the highest amount of overseas airlines’ trapped funds globally
Stakeholders. and tour firms have however emphasised the need for the Federal Government to direct the CBN to expedite the launch of the trapped funds
A. former President of the National Association of Nigerian Travel Agents-the trade body for neighborhood tour agents-Mr Bankole Bernard, who also confirmed the newest increase in IATA’s alternate fee for ticket sales, mentioned the Federal Government wanted to honour the provisions of the Bilateral Air Services Agreement signed with overseas countries especially as it affects the repatriation of funds
“Today,. the fee at which we are issuing tickets is N551 to a dollar. Is that the official rate? No, but that is the fee we are issuing tickets, which is moving closer to the black market fee. This means the situation of trapped funds would not have been if it had been accurately managed,” he said
“The funds grew to become trapped simply because we (the government) have been not ready to give overseas airlines funds at the official fee. Why didn’t you inform them the fee you would give them funds so that they can sell their tickets at a exclusive fee as long as it is official? After all, we have a number of alternate premiums. So, what will make this one different? Then, there will not be an situation of trapped funds and folks will do their company and the agony travellers are facing will not be there”
The. Managing Director of Financial Derivatives Company Limited, Bismarck Rewane, a analysis firm, mentioned overseas airlines may not be blamed for the newest increase in the alternate rate
He. said, “In dollar terms, airfares have not gone up, It is still the same amount. The increase will only impact these who purchase their tickets in naira . But we can’t blame overseas airlines. We need to put ourselves in their shoes . Why can’t they repatriate their funds? They are losing dollars by not being capable to repatriate their funds. Most of their bills are denominated in dollars, how will they pay for all these companies and goods when they can’t repatriate their funds?”
IATA had a few weeks put overseas airlines’ trapped funds in Nigeria at $743,721,097 as of January 2023
IATA. disclosed this in a letter addressed to the Minister of Aviation, Hadi Sirika, and signed by its Area Manager for West and Central Africa, Dr Samson Fatokun
IATA. urged the minister to intervene and confirm the decision of the situation of airlines’ blocked funds in Nigeria
The. letter learn in part, “For over a year, Nigeria has been the state with the highest amount of airline-blocked funds in the world. Please find attached the comparative table of airlines’ blocked funds by state. Moreover, as of January 2023, airlines’ blocked funds in Nigeria have elevated to $743721092. from $662m in January 2022 and $549m in December 2022
While. highlighting the social-economic impact of the airline-blocked funds in Nigeria, Fatokun mentioned the growing backlog of blocked funds of international airlines would impact negatively the overseas direct investment in the country, at a moment the state was anticipating investment in the concession of some of its main airports
He. also noted the continued delay in permitting overseas airlines to repatriate their funds violates BASA
Sirika. later promised that the Federal Government would confirm the backlogs of unremitted funds have been paid
He. was not specific on when this would be performed. The Central Bank of Nigeria had a few months ago released half of the trapped funds. Since then, however, the central bank looks not to be seeking in the direction of the overseas carriers as the amount of trapped funds rises on day-by-day basis
The. President of the Association of Foreign Airlines and Representatives, Mr Kingsley Nwokoma, mentioned IATA reviews alternate premiums periodically, including that the present increase could have passed by way of obligatory steps
According. to him, overseas carriers have been finding it frustrating to repatriate their funds, noting that this has made doing company in Nigeria very frustrating.
