Forex: International Airlines Increase Fares By 18 Percent

International airfares from Nigeria to all global destinations have gone up by another 10 per cent, after an initial increase of eight per cent about three weeks ago.

The development, which brings the total increase in airfares within the space of one month to 18 per cent, followed the upward review of the naira-dollar exchange rate international airlines use for the conversion of their airfares.

The review of the exchange rate is done by the International Air Transport Association, a Switzerland-based trade association representing over 290 airlines globally.

After almost two years of selling tickets at the rate N305/dollar, IATA three weeks ago reviewed the rate by eight per cent to N326/dollar.

But barely three weeks after the increase, the body has raised the exchange rate for the sale of tickets originating from Nigeria to N359/dolar.

A circular from IATA to accredited travel agents in Nigeria said the new exchange rate for the sale of tickets took effect on September 1, 2017.

The development has made international airfares out of Nigeria to increase by 18 per cent.

International airfares are quoted in dollar by foreign airlines. An increase in exchange rate means passengers buying flight tickets in the country will pay more in naira.

After the initial increase of eight per cent, It was gathered that foreign airlines flying into the country were not breaking even with the sale of tickets at 305/dollar.

Consequently, the carriers approached their trade body (IATA) in Switzerland, and the increase was consummated.

The umbrella body of travel agents in Nigeria, the National Association of Nigerian Travel Agents, on Sunday said there was a need for the Minister of Aviation, Senator Hadi Sirika, to intervene in the matter by convening a stakeholders’ meeting urgently.

The President, NANTA, Mr. Bankole Bernard, said the increase was unacceptable, saying it could send Nigerian travel agents out of business, as some airlines would now be selling their tickets overseas.

“This is unacceptable; we call on the Federal Government through the Minister of Aviation to convene a stakeholders’ meeting urgently to address the problem,’’ he said.

Travel agents said prior to the increase, the IATA rate had been fluctuating between 326 and 328 in the past few weeks.

The Ticketing Manager for Oversphere Travels, Abdulhasis Balogun, said the development would be a big loss for travel agents.

“The number one effect is that anyone who had booked a ticket with the rate of N325 as recently as last week, the increase will mean an increase in the fare. If anyone had made a reservation and hasn’t paid, the ticket will no longer be sold at the same rate,” he said.

“But ultimately, the travellers bear the greater brunt. It is a serious challenge for everyone. In other climes, the rate of exchange doesn’t fluctuate like this. Something needs to be done to keep it steady,” he added.

A travel agent had said that many travel agents were still in business because of their passion for the job.

It was reported last week that non-stop return flights in the economy class from Lagos to some destinations in the United States aboard the Delta Airlines, which used to cost between N750,000 and N850,000 during the summer season, were being offered between N850,000 and N940,000.

Non-stop return flights from Lagos to London, the United Kingdom in the economy class on the British Airways and Virgin Atlantic, which used to be between N350,000 and N550,000, had also risen up to between N400,000 to N600,000 for the summer season. A non-stop return flight in the economy class from Lagos to destinations in South Africa, aboard the South Africa Airways, which used to cost between N220,000 and N240,000, depending on the timing, had gone up to between N230,000 and N250,000 for the summer season.

“With the new exchange rate, the prices are expected to rise further, but that may not reduce passenger traffic,” a travel agent said.
Source: Today.ng