Travel agencies in the country have raised serious concern about foreign carriers’ upward review of exchange rates of their air fares to N551/$1 from the N444/$1 issued by the Central Bank of Nigeria (CBN) to the carriers over the past three years.
The agencies pointed out that the upward review of the air travel fare FX rate may make Nigerian travellers’ air fares for foreign trips to be among the highest globally if sustained.
The industry operators also observed that the upward review of the foreign carriers’ air fare FX rate may not be unconnected with the failure of the Central Bank of Nigeria (CBN) to remit the foreign carriers’ trapped funds in the country.
According to a news report from Nairametrics, one of the travel agents and Group Managing Director of Finchglow Travels, Mr. Bankole Bernard, confirmed the upward review of the air fare FX rates for travellers in the country.
Bankole, a past President of National Association of Nigeria Travel Agencies (NANTA), was quoted as saying during an interview with the news medium that travel agencies were now issuing air tickets to travellers at the N551/$1 as against the former N444/$1 FX rate.
The Finchglow boss expressed concern that the revised FX rate for official air fares was gradually moving towards the exchange rate at the parallel market, noting that this might, if sustained by the foreign carriers, reduce the exchange rate pressure on the local currency.
He said: “Today, the rate at which we are issuing tickets is N551 to a dollar. Is that the official rate? No, but that is the rate we are issuing tickets, which is moving closer to the black market rate, This means the issue of trapped funds would not have been if it had been properly managed.
“The funds became trapped because we were not ready to give them at the official rate. Why don’t you come out all this while and tell them the rate you would give the airlines so that they can sell their tickets at particular rates as long as it is official” After all, we have multiple exchange rates.
“So, what will make this one different? Then, there will not be an issue of trapped funds and people will be able to do their business, and the agony that you are putting a lot of travellers will not be there”, he added.
Due to the lingering problem of their trapped funds, some foreign airlines, including Etihad Airways and Emirates Airlines, have suspended their flight operations in Nigeria while other also reduced their flight frequencies to the country.
A few weeks ago, the International Air Transport Association (IATA) disclosed that the foreign carriers’ trapped funds in the country stood at about $743,731,027 million and urged the Federal Government to consider paying the funds based on mutually agreed terms and conditions.
