“It Was Sold for N3.5 million”: Expert Speaks on New Economy Tickets Price to UK, US
- Yinka Folami, the National Association of Nigeria Travel Agencies president, has shared insights on Nigeria’s travel industry
- He said that the difference in the exchange rate for ticket sales disrupt the industry's gradual stabilisation
- He said that the cost of fares has gradually dropped to places like the US and the UK for economy ticket
Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.
The recently elected President of the National Association of Nigeria Travel Agencies (NANTA), Yinka Folami, has voiced concerns about the travel industry's decline despite the industry's gradual stabilisation.
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Folami told Daily Sun that the decline is a direct result of the difference in the Rate of Exchange (ROE) for ticket sales applied daily by the International Air Transport Association (IATA), which is almost always higher than the black market.
According to him, tourists are increasingly being encouraged to source foreign currency through the black market for cross-border ticket purchases because the ROE gives a less attractive exchange rate (about N1,500 to a dollar) than the black market.
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Folami thinks the travel industry still faces the 40% market share loss that was reported a few months ago.
He also said that cross-border currency exchange is still a significan issue because travel agencies with a global reach can offer fares originating anywhere in the world, frequently for less than the cost of tickets bought in Nigeria. He claimed that this weakens Nigeria's position in the market.
Because foreign airlines operating in Nigeria were having trouble returning the money they made from ticket sales, they prevented passengers who wanted to purchase tickets from Nigeria from accessing their reduced inventory.
However, IATA reported on June 2 that the Central Bank of Nigeria (CBN) had released 98 percent of the detained funds; the $19 million that remained was because the CBN was still confirming the commercial banks' outstanding forward claims.
Cost of fares
According to him, the cost of fares has gradually dropped significantly.
"Passengers can now get economy tickets to fly to places like London for between N1.2 and N1.5 million and for the US, the average is between N1.5 and N2 million for economy which wasn’t the case before when it was sold for between N3 million and N3.5million.
He added:
“If we consider that the lower inventory fares have been opened, we can say that the cost of fares have dropped by at least 40%. About 90% of airlines have opened their lower inventories.”
Nigerian airlines set to commence South Africa, US routes
Legit.ng reported that the federal government has started the process of enabling Nigerian airlines to run overseas routes, particularly in the United States and South American countries.
Festus Keyamo, the minister of aviation and aerospace development, said this in a YouTube interview with O'tega Ogra titled, "Unfiltered: The Big Interview.”
Keyamo said the government is putting plans in place for domestic airlines in the country to commence direct flight operations to both the US and South America.
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Source: Legit.ng
