Airlines slash ticket sales on Nigeria routes over dollar scarcity

International airlines operating in Nigeria have begun moves to reduce the total number of tickets they sell on Nigerian routes amid worsening dollar scarcity that has made it difficult for them to repatriate billions of naira in ticket sale proceeds to their head offices abroad.

As the naira crisis continues to worsen, this development is expected to lead to a significant reduction in the about N1tn total ticket sales over 25 foreign carriers make on Nigerian routes.

This is happening as the International Air Transport Association–the global body for international carriers–said foreign airlines operating in Nigeria had been unable to repatriate about $144m (N60bn) in ticket sales back to their home countries, calling on the Federal Government to make forex available to the carriers to do so.

Already, United Kingdom mega carrier, British Airways, which make billions of naira in ticket sales from Nigerians annually, has issued a notice to travel agents informing them that it would be restricting ticket inventory in Nigeria due to exchange problems in the country.

The BA’s notice to travel agents was titled, “BA notification to control inventory due to unstable exchange rate.”

The notice read, “I wish to inform you of British Airways intention to control their Global Distribution System inventory by removing all the lower classes from the GDS, leaving only the below classes to be sold and issued and we all know the cost implications to this: Economy Y, Premium Economy W; Business Class J; First Class F. This became necessary due to fluctuating and unstable exchange rate in Nigeria. I hereby implore you all to pay for and issue all pending BA bookings with you before this takes effect”

Travel agents who spoke to journalists said the notice, which came about a week ago, might take effect anytime soon according to BA officials in Nigeria.

The development means over 65 per cent of the total number of categories of Economy Class, Business Class and First Class tickets available for sale will be removed by BA as soon as the notice takes effect.

“We are really surprised by this move. BA is doing what some other airlines have done tactically. BA officials told us they can’t repatriate their ticket sales and this is affecting their operations. As it is now, they want to reduce the total number of tickets they sell in Nigeria with this move. Until the CBN makes dollars available to the airlines to repatriate their ticket sales proceeds, things might continue to get worse,” the chief executive officer of a leading travel agency shared on condition of anonymity to avoid possible backlash.

Meanwhile, findings showed that Virgin Atlantic had technically reduced its ticket inventory by making cheaper ticket classes available in dollars.

This, according to travel operators, will force intending buyers to patronise tickets that are available in dollars, instead of the ones available in naira.

Already, other Middle East and African carriers have begun moves to sell tickets in dollars by encouraging travel operators to buy in dollars.

Also, it was learnt that intending individual buyers who patronise the airlines head offices are encouraged to buy tickets in dollars in other to get cheaper fares.

Travel operators said most of the foreign airlines were asking passengers, who patronise them directly through their head offices, to pay into their domiciliary accounts.

Meanwhile, the Central Bank of Nigeria has said it will launch an investigation into reports that some foreign carriers have started the sale of tickets in foreign currencies instead of the naira.

The spokesperson for CBN, Mr Osita Nwanisobi, said the apex bank would investigate and take appropriate action if any carrier was found culpable.

“The CBN is going to investigate such reports and take appropriate action, even though we have yet to get official reports on that.”

But IATA, the global airlines’ body had called on Nigeria and other countries with exchange rate problems to ensure forex  availablity to foreign carriers to repatriate their ticket sale proceeds.