Hike in airfares inevitable, experts say

Despite the Central Bank of Nigeria’s move to disburse $265m in trapped funds belonging foreign airlines, the carriers have shut down their global distribution services in Nigeria.

Based on this, aviation experts are of the view that the hike in air airfares is inevitable, because travel agents are being knocked out of the industry, leaving passengers at the mercy of black market rates when purchasing tickets.

Capt. Roland Iyayi told The PUNCH that the crisis with foreign airlines create unemployment and a hike in air tickets.

He said, “What is happening now is that with the airlines shutting down access to the GDS, travel agents will not be able to sell directly to passengers, and as a passenger, you might have to pay the travel agency monies in foreign exchange to buy tickets.

“The other major effect is the fact that airline tickets will continue to rise in price in Nigeria. Because the airlines in the guise of trying to ensure they recover all the monies, would invariably use rates on their online platforms that will be higher than the first-year rate issued by the central bank.”

Iyayi said Nigeria was not prudent with its extra reserves and foreign exchange.

“We are required to guarantee reciprocity. Foreign airlines should be able to take their monies out of the country. They should not be exposed to double taxation and all sorts of things enshrined in a typical bilateral or multilateral air services agreement,” he stated.

He said the government’s non-allowance to foreign airlines to take out the monies, “invariably, is a breach of the agreement we have with them in the first place. So all these are issues that ordinarily we should address.”

Another aviation expert, John Ojikutu, also spoke on the underlying issues between foreign airlines and Nigeria

He said, “If you are importing more than you are exporting, your balance of payment is to the advantage of the sources of your imports.

“That is why we are always unable to pay the foreign airlines that make more flights to our country than we make to theirs because we have neither national nor flag carriers to reciprocate the signed BASA (Bilateral Air Service Agreement) routes.”

Ojikutu explained that Nigeria had obligations under the international aviation organisation, in particular, to provide avenues for repatriation to all airlines.

“Foreign airlines pay for the aviation services of this country in foriegn exchange; the question is, what do we do with over $2bn that are paid to the service providers, which include the fuel marketers, FAAN, NAMA, ground handling and catering services, etc?”