…blame $283m trapped funds, forex scarcity
With effect from April 19 airlines on APG Interline Electronic Ticketing Agreements (IET) GP code 275 will start issuing of tickets in dollars in Nigeria instead of naira. According to the group, the difficulty in repatriating airlines’ money stuck in Nigeria and other countries coupled with foreign ex-change is responsible for the new policy.
APG IET gives travel agencies the facility to issue a much wider range of airlines and flight combinations than would otherwise be available via GDS. APG IET allows travel agencies to ticket a wide range of airlines not present on their local BSP and flight combinations with airlines where no interline agreements exist. Notable carriers on the APG IET platforms, aside from other global channels, are South African Airways, South African Airways, Fly Dubai, Kenya Airways, Middle East Airlines, Royal Air Maroc, Rwandair, Thai Airways, Turkish Airlines, FrenchBee, EgyptAir, ASKY, Air Seychelles, Air Algerie and Air Namibia. Others are Air Panama, Air Burkina, Avianca, Bangkok Airways, Cabo Verde Airlines, Fiji Airways, Hong Kong Airlines, and Malaysian Air.
APG in its travel advisory to its trade partners entitled, APG IET: Restrictions of Sales in US dollars says: “Dear travel partners, warm greetings from APG. This is to bring to your notice that with effect from April 19, 2022, GP would only accept issuing of tickets in US dollars and not naira.
This is mainly due to repatriation issues and the forex situation in the country. “This would most likely be a temporary measure till the forex situation improves.” This may come as a huge blow to travellers as sourcing foreign exchange from banks has become a herculean task, a situation that may have led to high fares as many can only resort to the black market to source foreign exchange at exorbitant rates. Investigation shows that airfares, especially for the Business Class of many the foreign airlines have almost doubled. At present, a Business Class ticket on British Airways and Virgin Atlantic has risen to between N2.7 million and N2.8 million from N1.8 million and N1.9 million.
A travel agent, who confirmed the development, said the carriers sell the cheaper classes only if they are available. He said airlines are selling higher so they can meet the demand of repatriating money home with a profit. Nigeria is said to currently be holding roughly $283 million (about N117.6 billion) worth of foreign airlines’ funds. The funds are proceeds from sales of tickets, among others, trapped in the country.
The Minister of Aviation, Hadi Sirika, made the disclosure during the inauguration of the new international terminal of the Murtala Muhammed Airport, Lagos, last month. The $283 million trapped funds is a sharp reduction from the $800 million trapped in the Central Bank of Nigeria (CBN) four years ago. In line with the Bilateral Air Service Agreements (BASAs) with countries, airline tickets are mostly sold in naira while the airlines would repatriate the funds in dollars through the country’s central bank. The Federal Government in 2018 cleared $600m in trapped funds but the figure began growing with IATA lamenting the blockade. Director-General, International Air Transport Association (IATA), Willie Walsh, recently said the blockade of airlinerevenues”contravenes international conventions and could slow the recovery of travel and tourism in affected markets as the airline industry struggles to recover from the COVID-19 crisis.”