By AYOOLA OLAOLUWA
The operations of travel agencies operating in the country have come under severe strain with the decision by foreign airlines to block them from accessing their websites to purchase tickets for potential travellers, Business Hallmark has learned.
Over the past few months, the sector and, by extension, the entire aviation industry have faced a very powerful threat – the withdrawal of foreign airlines from the country due to their inability to repatriate their funds.
The International Air Transport Association (IATA) had cried out in June that foreign carrier funds amounting to $464 million (198.6 billion naira) in June 2021 were trapped in the country, while calling on the government federal government to help release the funds.
The trapped funds, aviation industry sources told BH, had since increased as the nation and its economic managers grappled with currency scarcity.
Unable to repatriate funds from ticket sales to their home countries, foreign airlines began closing operations in Nigeria in August, starting with Emirates Airlines and British Airways.
“We have tried in every way to address our ongoing challenges in repatriating funds from Nigeria, and we have made considerable efforts to engage in dialogue with the relevant authorities for their urgent intervention to help find a workable solution.
“Unfortunately, there has been no progress. Consequently, Emirates has taken the difficult decision to suspend all flights to and from Nigeria, effective September 1, 2022, to limit further losses and damage. impact on our operational costs which continue to accumulate in the market.
“We sincerely regret the inconvenience caused to our customers, but the circumstances are beyond our control at this stage. We will endeavor to help affected customers make alternative travel arrangements where possible,” Emirates Airlines said in a statement.
British Airways has also informed its customers of an increase in the price of its plane tickets.
“Good afternoon. Please note that BA is moving to full fare F, J, W and Y seats from now on. Please let us issue all pending tickets to avoid a fare increase,” the airline advised.
Many other airlines including Air France-KLM, Virgin Atlantic, Lufthansa, Swiss Air, United and Delta Airlines were about to suspend their operations in Nigeria when the Federal Government intervened by ordering the Central Bank of Nigeria (CBN ) to unlock $265. million, or approximately 43% of the funds trapped.
A breakdown of the funds released shows that $230 million was released as special FX intervention, while $35 million was released through secondary market intervention program auctions of detail (SMIS).
However, several weeks after the CBN announced the release of funds, several airlines have not received a dime, while major carriers like KLM-Lufthansa, British Airways and Emirates Airlines have only been able to access 50 % of their funds trapped.
In an effort to generate more funds to make up for the shortfall caused by resorting to the parallel market to source foreign currencies, foreign airlines, it was learned, had decided to abolish their budget tickets which previously cost as little as N300,000 with premium tickets which is now N1.5 million.
Apart from this, many airlines have also locked travel agencies from their booking sites to avoid paying them huge commissions, which has led several travel agents to become inactive.
As a result, several large travel agencies have downsized, while smaller ones, without financial muscles, have closed their doors.
A leading travel agency headquartered in Ikeja, they gathered, has cut its workforce by more than 60%.
An affected employee who spoke to our development correspondent, lamented that of the 11 members of his local ward working in the company owned by an officer of his church, only 4 remain.
“Over seventy per cent of the company’s workers are church members, 11 of whom come from our local parish where the owner who also serves as general manager worships.
“At last count, 7 out of 11 were asked to leave until things improved. The pruning had been in the works for almost two months now. And I was one of the unlucky ones.
“Those who remain are not faring any better since they earn only 25% of their salary, while expenses such as transport costs are constantly increasing.
“However, I must clarify here that the management had assured us that they would call us back when the situation in the company improves,” said one of the workers concerned who spoke on condition of anonymity. .
Speaking on the developing situation, the President of the National Association of Travel Agencies of Nigeria (NANTA), Susan Akporiaye, confirmed that several travel agents had closed up shop and laid off their employees because they did not were unable to sell the exorbitant fares of foreign airlines, thus forcing many out of business.
“Travel agents are using the global distribution system and inventories have been blocked on this platform and even airline offices cannot issue tickets. (Airlines) that have not closed their inventory are limiting sales at the highest ticket stocks, which affected travel agent sales.
“Currently, several travel agents are unemployed. It is expected that if this continues, more than three million direct and indirect jobs will be lost.
“These are travel-related jobs that include hotels, shops around the airport, ground handlers, travel agents, cleaners, tourists, photographers and canteens, among others,” Akporiaye said. .
The NANTA boss also said some airlines did not receive any of their cash trapped in the country, while others received less than 25% of their funds.
She complained that the situation has created mistrust between the federal government and the airlines, hence the airlines’ decision to do things their own way by charging exorbitant fares to make up for lost funds.
“Between these strangling circumstances, airlines pulled lower inventory at all levels, selling at the highest possible openings in order to cushion their trapped funds.
“Their response, which we could term as ‘pandemic high tariff’, is aimed only at Nigeria and Nigerians, and cannot be seen anywhere in Africa, even in countries where their funds are also trapped in Nigeria.
“Nigerians have to buy tickets worth three to 4 million naira and are charged up to 1 million naira to change travel dates, even with tickets issued before these problems started.
“We appreciate the response to the release of some funds, we urge the government to urgently open new windows of engagement. We have called a meeting with all parties involved; including the CBN, the Minister of Aviation, the Minister of Finance, Foreign Airlines, Civil Aviation Authority of Nigeria and IATA.
“Amidst the challenges and exorbitant options for our customers and fellow travelers, not excluding the threat of job losses and store closures by most of our members, we remained optimistic that the federal government would respond,” she enthused.
Meanwhile, the federal government has warned that it will not hesitate to sanction any identified non-compliant international airline selling plane tickets in hard currency.
Aviation Minister, Senator Hadi Sirika, while issuing the warning, advised airlines not to push the nation to the wall, insisting that if the country needs the services of the airlines, the airlines also need the Nigerian market.
“It’s a violation of our local laws. They won’t be allowed. The high and powerful among them will be punished if caught doing this.
“The NCAA had been ordered to take action. And once we find an airline violating this, we will definitely deal with it. They blocked the access of travel agents. They also only made expensive tickets available.
“Our regulators are not sleeping. We have a very dynamic NCAA. Once they find an airline guilty, that airline will be punished because we have to protect our people. It is according to our agreements; what we have signed, and this in accordance with the international convention.
“They should also refrain from writing to us and putting things on social media. They have to go through diplomatic channels if they want a response from the federal government,” the minister said.