-Lagos-London fares 49% higher than Accra-London,
-162% higher than Cotonou-LondonNigeria Air project stalls,
-Airfares skyrocket over foreign exchange shortage


Nigerians have spent about $4.66bn on foreign air travels in 15 months, according to findings by The PUNCH. Data obtained from the Central Bank of Nigeria showed that the amount was sold to foreign airlines between the first quarter of 2022 and the first quarter of 2023.

Foreign airlines buy foreign exchange from the CBN to enable them to repatriate their ticket sale proceeds to their various home countries. About 25 foreign airlines currently operate into Nigeria

A breakdown of the CBN data showed that $496.44m was sold to foreign airlines in Q1 2022; $1.03bn in Q2 2022; $1.36bn in Q3 2022; $887.17m in Q4 2022; and $890.3m in Q1 2023. The figures indicate an increase of 79 per cent between Q1 2022 and Q1 2023.

The PUNCH observed that the highest amount was recorded in Q3 2022, with about $1.36bn. Despite the amount sold to the carriers, foreign airlines have been struggling to repatriate their funds.

In March, the International Air Transport Association, the top global trade association of international airlines, appealed to the Nigerian government to allow international airlines to repatriate their funds trapped in the country.

IATA said airlines’ trapped funds in Nigeria rose to $743.7m in January from the $662m recorded last December.

“For over a year, Nigeria has been the country with the highest amount of airline-blocked funds in the world,” the IATA said. Since the amount increased from $450m in May 2022, to $464m in July of the same year, the trapped funds have been linked to some of the higher fares on Nigerian routes.

Fares
The PUNCH also observed that it is more expensive to fly from Nigeria than other West African countries like Ghana and the Benin Republic.

Findings by one of our correspondents showed that passengers flying via Turkish Airlines from the Murtala Muhammad Airport in Lagos to Heathrow Airport in London paid $3,295 for a one-way economy ticket while passengers from Cotonou International Airport in Benin Republic paid $1,256 for a one-way economy ticket to London, representing 162.3 per cent difference in air ticket price.

Comparison between Lagos-London flight and Accra-London flight showed a  49.6 per cent difference in air ticket price. Lagos passengers paid $3,295 compared to $2,202 paid by Ghanaians on the same date and airline.

Also, an economy flight ticket from Lagos to Toronto was pegged at $2,737 while Benin to Toronto was put at $2,018, representing 35.6 per cent increase compared with Accra to Toronto at $2,546, representing 7.5 per cent.

Checks on Turkish Airlines indicate that the Lagos-New-York one-way economy ticket costs $3,689 while Benin to New York was pegged at $2,493. Accra to New York trip was put at $2,562. Meanwhile, a Lagos-Dubai flight was put at $944, while Cotonou-Dubai ticket was priced at $693. Accra-Dubai was put at $848.

Meanwhile, the Nigerian Civil Aviation Authority, the aviation industry regulator, recently released a three-month report on the activities of local and international flights.

NCAA report
In its report, the NCAA noted that the 25 international airlines which operated within the reviewed period had 24 flights cancelled, with 9,087 baggage delayed/ missing. Of this figure, the report said 7,942 baggage were found. Also, about 39 per cent of international flights (inbound and outbound) which operated in Nigeria between January and March were delayed

According to the report, of the 3,073 international flights operated within the aforementioned period, 1,193 flight schedules across 25 airlines were delayed. The 30-page report revealed 870,776 passengers (375,700 inbound and 495,076 outbound ) passed through the nation’s international airport wing between January and March.

review of cancelled flights showed that out of 1,114 international flights operated in January, seven were called off. In February, 13 out of 887 scheduled flights were cancelled—the highest recorded in the period under review, while only four of 1,072 operated flights in March were cancelled.

The report showed that Lufthansa recorded the highest number of cancelled flights, with six of its 147 operated flights terminated in the first quarter of this year. Qatar Air followed with four, while Asky and Rwanda Airlines had three cancelled flights each, among others.

During the period under review, the NCAA noted that it received 27 complaints from international operations and nine cases were resolved. “However, most of the cases were resolved after follow-up and additional backlog from the previous months,” the report said.

Experts React

Experts have expressed concern over higher fares on Nigerian routes as the Nigeria Air project continues to face delays.

The controversial national carrier project has faced legal hurdles amid corruption allegations. The Federal Government has yet to invite the former Minister of Aviation, Hadi Sirika, to answer questions on the project.

Following the CBN forex reforms, air fares have increased by over 50 per cent on Nigerian routes. Airfares which used to be priced at 460/dollar, now went for 743/dollar as of Friday.

Meanwhile, the Chief Executive Officer, Centurion Security, Group Capt John Ojikutu, however, emphasised the need for Nigeria to establish three flag carriers in order to compete with international airlines.

He argued that the move would help to reduce capital flight and increase the country’s share of passenger traffic.

He said,”What we need to do is to establish at least three flag carriers to compete with international airlines that make an average of 30 flights daily to Nigeria. We should strive to make or reciprocate at least 30 per cent, if not 50 per cent, of the daily flights. This will enable us to share 20/30 per cent of the passenger traffic.”

He added, “The exchange rate has not necessarily made the figure high but the airfare is equally high. If foreign airlines can get forex at the official exchange rate, the airfare would not be as high as it is today. There is very little the government can do than to designate flag carriers among the domestic airlines to compete with the foreign airlines”

The Head of Research at Zenith Travels, Mr Olumide Ohunayo, said Nigeria needed strong airlines to compete against foreign carriers.

 He said, “The Fly Nigeria Act did not see the light of day. Coming back to the issue at stake, it’s inevitable, the capital flight will continue until we build airlines that can compete, and meet the standards that international airlines can partner with. You cannot say until you have a national carrier, it is better to have flag carriers, the more the merrier. We must encourage our airlines to go out and move beyond single ownership. They must open up ownership and management to support this then we can now start talking about the Fly Nigeria Act.

He added, “The fares are high now because the demand is still very high, Nigerians travel a lot, we always have a reason to travel. The supply right now is meeting the demand, so we need to increase supply.”

https://www.google.com/amp/s/punchng.com/foreign-airlines-repatriate-over-4bn-in-15-months/%3famp

I can't understand the reason the dollar is still very high

This is just a huge loss on the the ebbing Nigerian economy. We are not maximising these funds as our local airlines are not even part of those benefiting from the fray neither does Nigeria have a national carrier frequenting most of the lucrative international routes.

The PUNCH also observed that it is more expensive to fly from Nigeria than other West African countries like Ghana and the Benin Republic.

Why are these Western powers always treating Nigeria like a leper. Imagine the wide disparity in the cost of international airfares between us and our neighbours. Imagine British making IELTS compulsory for immigrating Nigerians while South Africans are exempted? Why?

Racoon:
This is just a huge loss on the the ebbing Nigerian economy. We are not maximising these funds as our local airlines are not even part of those benefiting from the fray neither does Nigeria have a national carrier frequenting most of the lucrative international routes.

They are coded bureau de change. This is what Emefiele wanted to prevent. They are a huge drain on our fx reserves and literally have no direct impact on our economy beyond travel because they don't have offices in Nigeria and do not invest in the country.

Some of the countries don't even spend USD and we could swap our currencies like Ethiopia air did with Dangote with no single USD paid to repatriate their funds.

This is not sustainable and FG has to step in again.

Oponu as the capitalist you Igbos claim to be it is ok for your government to hold on to funds belonging to private companies ba ?! If na you igbo dollar FG hold won't your fathers have wail to death by now

Racoon:
This is just a huge loss on the the ebbing Nigerian economy. We are not maximising these funds as our local airlines are not even part of those benefiting from the fray neither does Nigeria have a national carrier frequenting most of the lucrative international routes.

Everything goes in Nigeria

Corrupt institutions in Nigeria, flight cheaper in Cotonou than Nigeria, cfa now has more value than naira

Ok

jonapeters:
I can't understand the reason the dollar is still very high

Give women the opportunity to rule and see the magic. Men have failed.

Ok

Noted.

They keep ripping Nigeria off and our leaders don't care.

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jonapeters:
I can't understand the reason the dollar is still very high

1. Have we started producing the majority of products consumed.

2. The recent reversal in the FX policies and the CBN policy has been lesss than 2 months I don't see why you'd expect it to be immediate. I don't estimate the FX would start to see a redress for another 2 quarters.
Even when things start to correct in the market the niara would only find its right value, that doesn't mean it will ever be at parity or that it should ever be, what matters is the strength of the economy, the purchasing power of the people, cost of living and a detachment from being dependent on imports

sweetgala:


1. Have we started producing the majority of products consumed.

2. The recent reversal in the FX policies and the CBN policy has been lesss than 2 months I don't see why you'd expect it to be immediate. I don't estimate the FX would start to see a redress for another 2 quarters.
Even when things start to correct in the market the niara would only find its right value, that doesn't mean it will ever be at parity or that it should ever be, what matters is the strength of the economy, the purchasing power of the people, cost of living and a detachment from being dependent on imports

But the poverty n suffering is immediate..

See your life?

NaijaTechyy:
Bad economy

Good economy!

We now know the airline sector is very lucrative in Nigeria..

I noticed it when I bought Ticket for my wife's Lagos to Toronto

It was 46% cheaper if she had taken the flight from Banjul, Gambia than from Lagos.

She wanted to go through Gambia as she wanted to participate in an international event in Gambia before the event was cancelled.

We had to book the expensive Lagos - Dublin - Toronto.

EcoNews:
Oponu as the capitalist you Igbos claim to be it is ok for your government to hold on to funds belonging to private companies ba ?! If na you igbo dollar FG hold won't your fathers have wail to death by now

What has warranted this attack. His views are nationalistic and even free stuff responded well. Your tribalists whether from SE or SW are just scums.
@ topic, the disparity is high and I think FG should look at how to make things work in our favour.

Shey na until their money depreciate finish u wan make dem begin repatriate....
People wey collect loan from investors in dollars, use am do business at 400 naira/$. Now they have to pay back at 850. Dey won't wait until e reach 1200 naira

I think the airfare went up during buhari. Remember they tax everything? Beer went from M200 to 600. It was because of tax on drink and beverages. They were looking for more money they keep increasing tax for airfare. To the extent they want to barrow the money from all dormant account. It was only the NCC that never gave the ministry of finance any chance on the telecommunications and digital economy. If not they would have spoil internet data and digital economy as well.

More like anything they touches never remain the same. Buhari was really clueless and a mistake

taylor88:
Nigeria is finished

Wonderful

It's you and all yours that are FINISHED.

Having a national carrier would have helped reduce the monies going to the foreign carriers and capital freight a bit.

Racoon:
Why are these Western powers always treating Nigeria like a leper. Imagine the wide disparity in the cost of international airfares between us and our neighbours. Imagine British making IELTS compulsory for immigrating Nigerians while South Africans are exempted? Why?

Because 9ja na Mumu. If Ethiopia with all their wars and famines over the years can maintain a viable airline, what excuse has Nigeria?

SA has about 8% white population that IELTS will affect. They can't work out a way to exclude only whites and Asians from IELTS without causing uproar. If one day Malema becomes president and Mugabe era Zim exit in droves of white people happens, such whites won't need IELTS in UK and will be introduced for SA.

Na today?

What a ridiculous non-story! These foreign airlines provided services which Nigerians voluntarily decided to purchase, so what exactly is wrong with them taking home the funds they earned? Were you expecting them to leave their funds stuck in Nigeria indefinitely? You might as well ask them to cease serving Nigeria altogether at that rate - nobody is going to put money into another country if they have no means of ever getting anything back after doing so.

If Nigerians seem to be charged more for flights than people living in other countries, the right thing to do is not to blame profit-seeking private enterprises for doing what they were established to do, but to look at why conditions in Nigeria might be enabling them to make such extraordinary profits in this particular market (if they are indeed doing so, as revenue is not the same as profit). Does Nigeria's airline regulator impose extraordinary burdens that justify charging more? Is there something about the way we treat foreign airlines which makes them demand higher profits to justify the risk of doing business here? Are our busiest airports capacity-constrained? Have the landing slots in them been efficiently allocated according to demand, rather than through the age-old Nigerian favoritism for a few well-connected groups?

There could be any number of reasons why these price disparities exist, but determining what they are requires careful, thorough research, instead of flying off the handle in an entitled rage with nonsensical complaints about foreign businesses who used funds they raised abroad to provide services now deciding to take their earnings back to the countries where they raised the money to pay for the planes, pilots and other staff who made the services possible. Anyone who doesn't like this is free to patronise domestic alternatives or simply stay in Nigeria. Nobody is being forced at gunpoint to fly abroad on a foreign airline.