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Travel agents protest dollar charges by airlines in Nigeria

Travel Agents in Nigeria Voice Strong Reactions to Airlines' Shift to Dollar-Based Ticket Sales

In a significant development shaking Nigeria's aviation and travel sectors, foreign airlines operating in the country have increasingly adopted a policy of charging for tickets in US dollars, prompting widespread reactions from local travel agents. This move, driven by ongoing foreign exchange challenges and trapped funds, has sparked debates on its implications for the economy, travelers, and the broader industry. Travel agents, who form a critical link in the ticket distribution chain, have expressed frustration, highlighting how this shift disrupts their operations, increases costs for Nigerians, and could lead to reduced air travel demand.

The controversy stems from Nigeria's persistent foreign exchange liquidity issues, which have left billions of dollars owed to foreign airlines stuck in the country. According to industry reports, airlines such as Emirates, British Airways, and Lufthansa have faced difficulties repatriating their earnings due to Central Bank of Nigeria (CBN) restrictions and a shortage of dollars in the official market. To mitigate these losses, many carriers have resorted to selling tickets exclusively in dollars, bypassing the naira entirely. This practice, while not entirely new, has intensified in recent months, with some airlines blocking naira-denominated sales through local agents and insisting on dollar payments via international credit cards or direct bookings on their websites.

Travel agents, represented by bodies like the National Association of Nigeria Travel Agencies (NANTA), have been vocal in their opposition. Susan Akporiaye, President of NANTA, described the policy as a "direct assault on the Nigerian travel ecosystem." In an interview, she explained that agents, who traditionally earn commissions from naira-based ticket sales, are now sidelined as airlines push for dollar transactions. "This is not just about currency; it's about survival," Akporiaye stated. "Our members are losing business because many Nigerians cannot afford to pay in dollars at the black market rate, which is often inflated. We're seeing a drop in bookings, and it's affecting livelihoods across the board."

The impact on consumers is equally profound. For the average Nigerian traveler, purchasing an international flight ticket now requires navigating complex payment hurdles. With the official exchange rate hovering around N1,600 to the dollar and the parallel market rate exceeding N1,700, the effective cost of tickets has skyrocketed. A round-trip ticket from Lagos to London, previously priced at around N800,000 in naira, could now demand the equivalent of over N1.2 million when converted from dollars at unfavorable rates. This pricing model exacerbates the financial strain on middle-class families, business travelers, and students studying abroad, many of whom rely on affordable air travel.

Agents argue that this dollarization discriminates against local players and favors international booking platforms. Yinka Folami, a Lagos-based travel agent with over 15 years in the industry, shared his concerns: "We've built our businesses on serving the Nigerian market, but now airlines are treating us like second-class partners. They block our systems from issuing naira tickets, forcing customers to go online or use foreign agents. This is eroding our market share and could lead to job losses in the sector." Folami's agency, which handles corporate and leisure travel, has reported a 30% decline in sales since the policy's escalation, a trend echoed by many peers.

Beyond individual agents, the broader economic ramifications are drawing attention. Nigeria's aviation industry contributes significantly to GDP through tourism, trade, and remittances. However, with foreign airlines threatening to reduce flights or exit the market altogether— as seen with Emirates' suspension of operations in 2022—the dollar charging could accelerate capital flight and deter investment. The International Air Transport Association (IATA) has repeatedly urged the Nigerian government to release trapped funds, estimated at over $800 million as of mid-2024. IATA's Regional Vice President for Africa and the Middle East, Kamil Alawadhi, noted that such policies are a "last resort" for airlines to protect their revenues amid forex volatility.

Government responses have been mixed. The CBN has made efforts to clear some backlogs, releasing portions of the owed funds in tranches, but agents criticize the pace as insufficient. Aviation Minister Festus Keyamo has engaged in dialogues with airline representatives, promising reforms to stabilize the forex market. In a recent stakeholders' meeting, Keyamo emphasized the need for a balanced approach: "We understand the airlines' plight, but we must protect Nigerian interests. Charging in dollars alienates our citizens and undermines local businesses." Despite these assurances, travel agents remain skeptical, calling for stricter regulations to mandate naira sales for domestic segments or incentives for agents handling local currencies.

The situation has also ignited discussions on the role of technology in travel booking. With airlines promoting direct online sales in dollars, platforms like Google Flights and airline apps are gaining traction, potentially rendering traditional agents obsolete. However, agents counter that their value lies in personalized service, especially in a market where many Nigerians lack access to international payment methods or face card restrictions. "Not everyone has a dollar card or trusts online transactions," said Daisi Olotu, a travel consultant in Abuja. "We provide guidance on visas, itineraries, and even emergency support—services that algorithms can't replicate."

Looking ahead, industry experts predict that without swift intervention, the dollar charging trend could lead to a bifurcated market: one for affluent travelers who can afford dollar payments and another for the masses reliant on budget options, possibly shifting demand to regional carriers like Air Peace or Arik Air, which still accept naira. Air Peace, Nigeria's largest domestic airline, has positioned itself as a counterforce by expanding international routes and maintaining naira pricing, earning praise from agents. "Supporting local airlines is key," Akporiaye urged. "They understand our economy and keep fares accessible."

Environmental and sustainability angles are also emerging in the discourse. Reduced flight frequencies due to airline pullbacks could lower carbon emissions, but at the cost of connectivity. Agents advocate for a holistic solution, including forex reforms, better fund repatriation mechanisms, and partnerships between airlines and local agents to co-create hybrid payment systems.

In conclusion, the shift to dollar charges by airlines in Nigeria represents a microcosm of the country's broader economic challenges, from forex scarcity to global trade imbalances. Travel agents' reactions underscore a plea for equity and sustainability in the industry. As negotiations continue, the hope is for policies that safeguard both foreign investments and local enterprises, ensuring that air travel remains a viable option for all Nigerians. This ongoing saga highlights the interconnectedness of global aviation with national economic policies, and its resolution could set precedents for other emerging markets facing similar dilemmas.

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[ https://www.legit.ng/business-economy/industry/1666625-travel-agents-react-dollar-charges-by-airlines-nigeria/ ]