Africa: Foreign Airlines Reap $700m from Ticket Sales in Eight Months
Following the improvement in the Nigerian economy after the recession that hit the country, foreign airlines operating in the country sold tickets worth $700 million as at the end of August 2019, according to figures obtained from the International Air Transport Association (IATA).
The data represented a significant increase in ticket sales compared with the total of $800 million recorded in the whole of 2018.
IATA has projected $1 billion foreign airlines’ ticket sales for 2019.
While the improved economic climate encouraged more international travels by Nigerians on businesses and pleasures trips, as well as foreigners, who come into Nigeria for businesses, some Nigerians also travelled out in search of greener pastures.
President of the National Association of Nigeria Travel Agencies (NANTA), Mr. Bankole Bernard, who confirmed the development in a telephone interview with THISDAY, anticipated that the country might surpass the projected $1 billion by the end of the year due to the Christmas season, which records influx of inbound passenger movement, as many Nigerians return to the country to celebrate the Yuletide season.
Quoting IATA records, Bankole said, “The market has stabilised. There is upward trend and more foreign airlines have shown interest in Nigeria. This confirms that the industry is doing well under the Minister of Aviation, Senator Hadi Sirika. I am seeing significant changes. There are a lot of changes taking place under the minister.”
He acknowledged that generally the nation’s economy is not yet doing very well but projected that more Nigerians would be travelling overseas as the economy improved and that means more ticket sales by the airlines.
Bernard, the Chief Executive Officer of one of the biggest travel agencies in Nigeria, Finchglow Travels, said the International Civil Aviation Organisation (ICAO) was pleased with the Nigerian aviation sector because of the positive air safety record, hence the high interest of foreign airlines in Nigeria.
He said: “For us in the downstream sub-sector of the industry there has been no default in payment of ticket revenues to the airlines like in the past. IATA acknowledged this and that is why it introduced IATA Easy Pay in Nigeria first before many other countries in the continent.
“In fact, Kenya, which hitherto had bigger travel agencies, came to understudy us. If we are not doing something good, they would not have come to understudy us and this shows that we are doing better than Kenya now.”
Travel expert and organiser of Akwaaba African Travel Market, Ikechi Uko, attributed the increase in ticket sales to slight improvement in the economy, higher outbound flights as well as the search of greener pastures.
“From the figures made available recently by NANTA, there is increase in international passenger movement this year and last year due to slight improvement in the economy.
“There is also more one-way ticket on outbound flights, which many attributed to apprehension and many of those not coming back are heading to Canada and Australia. This is affecting the Nigerian middle class mainly; those with skills, from medical doctors, to bankers, engineers, journalists and even photographers. This is because these countries want to double their population but they are making the choice of those they want to allow to come. They have significantly reduced the middle-class population in Nigeria,” Uko noted.
However, some operators have expressed concern that over 85 per cent of ticket sales by the foreign airlines would be repatriated.
Industry consultant and CEO of Belujane Konsult, Chris Aligbe, said something has to be done urgently to recover the loss Nigeria was recording with the repatriation of huge foreign exchange from the country.
“We have to do something quickly and see how we can pull back the loss. If we don’t do something quickly it will escalate as our economy improves because more Nigerians will travel and that means more money for the foreign carriers. I don’t see how any responsible government will allow that to continue to happen,” Aligbe said.
Also reacting to the huge revenue from ticket sales by foreign airlines in Nigeria, the President of Sabre Network, Africa and also the President of industry think-tank body, Aviation Round Table (ART), Dr. Gbenga Olowo, told THISDAY that even though Nigeria needs the foreign airlines, efforts should be made by the country to balance the trade by empowering local carriers to compete with the international airlines.
He called for the strengthening of Nigerian airlines so that they could compete and reverse the negative balance of trade.
But the CEO of Aero Contractors, Captain Ado Sanusi, said there was no need to tackle the foreign carriers, saying policies should be developed to encourage Nigerian carriers to operate international routes.
“For example, Air Peace and Emirates can code-share on the UAE routes. We should begin to cut back on the money being repatriated from Nigeria by foreign carriers. In the US, a foreign carrier that operates to the country is not allowed to bring in cargo flight; it must contract a local airline to do that. A lot of cargo come to Nigeria from Emirates and all the Emirates flights that come to Nigeria is always filled with cargo,” he said.
He rejected the argument by government officials from the Ministry of Aviation that many foreign airlines are allowed to come into the country in order to encourage competition and low fares, saying that foreign airlines have relatively outrageous fares for Nigerian routes because indigenous carriers are not competing effectively with them.
Former Managing Director of Capital Airlines and industry consultant, Mr. Amos Akpan, said the fact that foreign airlines would sell about $1 billion ticket in a year in Nigeria showed that Nigeria remains an important market and Nigerian airlines should be made to benefit from the huge potential.
By Chinedu Eze