Exchange rate: Foreign airlines raise fares.
International airfares out of Nigeria have recorded a further rise following an increase in exchange rate for ticket prices by the International Air Transport Association, OYETUNJI ABIOYE and MAUREEN IHUA-MADUENYI report.
The international airfares from Lagos to various destinations across the globe have recorded a further increase following the announcement of a new dollar exchange rate for the sale of air tickets.
The Switzerland-based IATA, the trade association representing over 290 global airlines, reviewed the dollar exchange rate for the sale of tickets for flights out of Nigeria from 305/dollar to 326/dollar about three weeks ago.
As a result of this development, international airfares out of Nigeria, which are already on the high side, have risen further by seven per cent.
Travel companies issuing international tickets in Nigeria confirmed to our correspondent on Sunday that airfares had recorded a further increase.
Although some travel agents expressed the hope that the development would not affect sales volume, other felt some cost-conscious passengers might choose to cancel proposed travels owing to the rise.
A survey by our correspondent on Sunday showed 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 up to between N400,000 to N600,000 for the summer season.
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.
Although airfares actually rose as a result of the increase in the exchange rate for the sale of tickets from 305/dollar to 326/dollar, some travel agents said the development had made foreign airlines to release some cheaper classes of airfares that hitherto were blocked.
Unconfirmed sources said foreign airlines flying into the country were not breaking even with the sale of tickets at 305/dollar.
The development, it was learnt, forced them to approach IATA to increase the exchange rate from 305/dollar to 326/dollar.
Foreign airlines had allegedly blocked travel agents from accessing some cheaper classes of seats for passengers.
However, the blocking of cheaper classes of seats was said to be partly connected with the old problem of not being able to access adequate amount of dollars from the Central Bank of Nigeria to repatriate their naira revenue.
Travel agents said IATA agreed to increase the exchange rate on the premise that airlines would unblock the cheaper classes of seats.
The President, National Association of Nigerian Travel Agents, Mr. Bernard Bankole, confirmed that foreign airlines had unblocked some cheaper classes of seats for travel agents, following the increase in the exchange rate from 305/dollar to 326/dollar by IATA.
Bankole said, “Airlines have unblocked some cheaper classes of seats that were not available for sale before now. For example, flights to London that used to be N450,000 or N550,000 have come down. We have flights of N350,000 on the British Airways, Virgin Atlantic now. We now have Oscar class and Sugar class of seats that can be bought for N270,000 and N280,000. IATA has increased the exchange rate for the sale of ticket, but foreign airlines have in turn opened the cheaper classes.”’
Airfares especially international travel tickets have witnessed significant rise in the last two years following the depreciation of the naira from 155/dollar to the current 326/dollar official.
Currently, travel agents said the IATA rate had been fluctuating between N325/dollar and N328/dollar.
The fluctuation in the exchange rate has in the last few years forced some foreign airlines to shut down their services in Nigeria. They included the United Airlines, which used to fly between Lagos and Houston, and the Spanish carrier, Iberia. They both left due to difficulties in converting proceeds from ticket sales into dollars for repatriation.
A travel agent, who spoke on condition of anonymity, said the problem had forced many travel agencies out of business.
“The fluctuation has been like this since the recession but we are yet to get used to it. When it just rose to N200, a lot of people were still travelling because you could still get tickets for N300,000 to New York but since it rose further, many licensed IATA agents have shut down. What keep many of us in the business are the push and the belief that it will get better,” she said.
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Atiku is talking about promises and trust…..lol.
Wonders shall never end.
Someone should pls buy Atiku mirror.
Atiku are you a honest & trustworthy man? Swear by god of thunder.
Thank you sir, just the massage we need in this period of religious and ethnic divides. Barka da Sallah to all Muslims.
A nation at a crossroads and Nigeria needs a leader that can bring about peace,
security of lives and properties and visible infrastructure that would.
sustain developmental activities. The PDP have their chance with nothing.
to show. Let’s give APC a chance. With Atiku, APC can put an end to.
this calamitous regime. He’s a true Democrat with a fellowship that.
cuts across the six Geo-political zones. This nation should and must.
The Cheapest Way to Buy Two or More Airline Tickets.
If you're traveling on your own, no problem; just book your tickets. All you have to do is compare prices on an airfare search site because no single airline always has the cheapest flights (see Which U. S. Airline Costs the Least? It Depends ).
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The Reservation System Quirk.
The reason you should never buy more than one ticket in the same reservation, at least to start, is a quirk in airline reservation systems that requires every ticket purchased in a single reservation (or transaction) be the same price. If there aren't enough of the cheapest-priced tickets available, the system moves up to the next highest level of ticket prices where there are enough for the transaction and you will pay the higher price for all of them.
To help make sense of this, it's useful to know that there are about 10 different price points on each plane; there are even multiple price points in economy class and prices vary depending on when you buy your tickets.
Let's say you're seated in a middle seat in coach and paid $100 for your ticket. To your left is a woman who paid the next lowest fare of $125 and to your right is a fellow who paid the top economy price of $140. I'm pulling these figures out of the air for the purpose of this column but all are well within the range of possibility.
Now say you will fly as a family of four. You buy your tickets in a single transaction as usual; if there are four tickets available at the lowest price, terrific. You got the $400 deal.
But let's say there are only two of the cheapest tickets left. If you buy all four tickets in one transaction, you will not pay $100 + $100 and $125 + $125 for a total of $450. Instead, you will pay a total of $500 or $125 for each and every ticket. Remember the system quirk? The system will not split up a group to mix ticket prices because again, all tickets sold in a single transaction must be sold for the same price. When there are not enough of the cheaper-priced tickets to match the number of passengers, the reservations system automatically bumps up to a price tier where there are enough same-priced tickets.
This can be avoided, though. All it takes is a few extra moments of your time.
Purchase Tickets One at a Time.
Begin shopping by opening two separate booking transactions. I open up two different browsers, then do the following.
Open a booking for the total number of people in your party Open a booking for one person.
If the price in the browser for the single ticket is cheaper than the price offered in the total booking browser, you know there is at least one cheaper seat available. Buy it, and repeat the process of buying a cheaper ticket one at a time. You may end up buying all the tickets you need, one at a time.
If the price of one ticket rises to that in your "total booking" browser, you can use that second browser to order the remaining seats you need all at once. Or keep using the same browser and execute a multiple order for the remaining tickets at the higher price.
You may end up using one or both browsers, depending on which ticket prices you found and what's easiest for you.
Final note: In case of error, U. S. airlines are required to give you a 24-hour ‘change-your-mind’ grace period. Most offer a straight refund within this period, but American Airlines’ policy is to allow shoppers to hold a booking for 24 hours (with no price change) without paying for it so keep this in mind.
The Bottom Line.
Never automatically buy more than one ticket at a time to avoid the reservations-system quirk that could push ticket prices up to a higher category. Take the extra time to check prices and split up your transactions if needed to save the maximum amount. For more about saving money, see Airline Ticket Prices: What a Difference a Day Makes and An Insider's Guide: Finding Cheap Airline Tickets .
Rick Seaney is the CEO and cofounder of FareCompare.
Foreign airlines, forex and high fares.
A Delta Airlines / AFP PHOTO / KAREN BLEIER.
It has been inscrutable why Nigeria’s population and other economic indices have not reflected in favourable international airfares out of Nigeria over the years. The fares have always been incredibly high in and out of seasons. The transactions have proven wrong even Isaac Newton’s third law of motion, which states that, “what goes up must come down,” as the fares keep rising and rising. Even recently the Switzerland-based IATA, the trade association representing over 290 global airlines, reviewed the dollar exchange rate for the sale of tickets for flights out of Nigeria from 305 to 326 per dollar. The fluctuation in the exchange rate has in the last few years forced some foreign airlines, including the United Airlines, which used to fly between Lagos and Houston, and Spanish carrier, Iberia to shut down their services in Nigeria. They both stop operating the Nigerian route because of the difficulties in converting proceeds from ticket sales into dollars for repatriation. This by extension has led to loss of livelihoods as the ground staff of the airlines have been thrown into the labour market and some travel agencies may have been forced out of business because ticket sales have plummeted. For most corporate bodies, business travel budgets will be adversely affected. This is part of the unease in doing business in Nigeria where we daily crave for foreign direct investment.
If this situation is not checked, it is likely to get worse not just for international flights, but also for the local flights. Major actors in the Nigerian aviation sector say that the current federal government foreign exchange (FX) policy is causing forex shortages and taking a big toll on local airline operators too. It has made the operating environment crushing, leading to liquidation of many local airlines. Available statistics show that over 150 airlines have gone into extinctions in the last few years and only a few are in operation. A roll call of some airlines that died recently includes Okada Air, Kabo Air, ADC, Bellview, Chanchangi, Sosoliso, Virgin Nigeria, which later became Air Nigeria, Afrijet, Discovery Air amongst others. However, Arik Air, Aero Contractors, Air Peace, Med-View, Dana Air, Overland, Azman Air and First Nation are the eight surviving airlines with all their carriers totalling 44 aircraft. Perhaps, were it not for the Assets Management Corporation of Nigeria (AMCON) that took over the management of Arik airline for alleged indebtedness, the story would have been different by now. This is unfortunate given the promise of the major airline when it began operation less than two decades ago.
Apart from danger of airlines going into extinction, when aircraft are due for maintenance, but are unable to raise the required foreign exchange to carry out the maintenance schedules, passengers’ safety becomes risky because airline operators may be tempted to cut corners in their maintenance culture as scarcity of funds makes it harder to procure spare parts among others.
In the same vein, the foreign exchange paucity may affect major checks that are carried out overseas. The paradox here is that airlines earn their revenue in naira while they procure and maintain in foreign currencies. Meanwhile, the value of the naira has not been helpful in recent times and so more fund will be required for maintenance. This is disheartening for a country with more than 50 years of airline operations. In contrast, some African countries, which are far behind Nigeria in aviation have developed and continued to grow in terms of running a profitable aviation sector. Ethiopian Airline for example has 92 aircraft and it is adjudged number one in Africa. The country is not rated as one of the giants of Africa when economy comes to be discussed and measured.
Obviously, the surviving domestic airlines in Nigeria are all challenged with the age long affliction of harsh and crippling operating environment occasioned by fluctuating exchange rate, poor government policies, multiple taxation, infrastructural deficit, non-implementation of gazetted policies that will enhance performance, and poor access to credit.
There is no doubt that these multiple problems steadily erode revenue and do not encourage growth of airlines, rather them. Therefore, it is obvious that the present operating environment cannot guarantee survival let alone attracting more investors.
Against, the backdrop that local airlines are catalysts for economic development, used to energise other sectors, providing seamless intra-connectivity by taking passengers from one state to another, it is imperative that the National Assembly should urgently review all the legislations affecting airlines operations. Besides, relevant government ministries, agencies and departments should come up with favourable foreign exchange policy to address the challenge of foreign exchange rate in the aviation sector because aviation friendly countries have and enjoy benefits of stable and easily convertible currencies without draconian policies that adversely affect airline operations.
Also, government should treat the aviation industry as an infant industry and give them tax moratorium. At the same time, professional managers should be used to run the critical areas of operations. Mediocrity nurtured by poor customer relations has been fingered in the industry in the country.
The Aviation Ministry should not be seen as an innocent bystander, in this connection. They should think through modern and attractive policies that will lead to growth and sustainable business environment of the industry that is so, so needed for rebranding the business environment. It is gratifying to note that the industry is part of the target of recent executive orders aimed at ease of doing business in the country.
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