Foreign airlines defend dollar ticket sales

… Say it is in line with agreement with FG

…It’s anti-trade, harmful to economy, argue travel agents

Foreign airlines say that their continued sale of flight tickets in dollars is in line with existing agreements with the federal government and not an imposition on Nigerian travellers.

The clarification follows growing criticism from travel agents who say that despite the federal government’s clearance of trapped airline funds, some carriers still charge in dollars, thereby contravening Nigerian laws, worsening forex pressure, and undermining the naira.

Travel agents who spoke with BusinessDay mentioned three airlines currently collecting ticket sales in dollars to include Emirates, Delta and United airlines.

According to United Airlines, ticket sales in Nigeria are offered in both naira and dollars, noting that it has been selling tickets in both currencies since early October.

Delta Air Lines also offers its tickets in dollars. Justifying the rationale behind the action, Mary Gbobaniyi, sales manager for West Africa, Delta Air Lines, told BusinessDay that “Delta’s continued sale of tickets in U.S. dollars is consistent with the provisions of the Bilateral Air Services Agreement (BASA) between Nigeria and the United States.”

As of the time of filing this report, Emirates had yet to speak on the issue as the airline could not be reached.

However, a source close to the airline told BusinessDay that the decision of Emirates to collect ticket sales in dollars was part of the agreement it reached with the federal government before resuming flight operations into Nigeria.

The airline resumed operations into Nigeria in October 2024, two years after it suspended flight operations from the country over trapped funds.

Kingsley Nwokoma, president, Foreign Airlines and Representative in Nigeria (AFARN), told BusinessDay that the decision to sell tickets in dollars is predicated on BASA – an agreement regulating the operations of air services between two countries.

“These agreements are most times reciprocal agreements. If there wasn’t an agreement entered with the government, then the Nigeria Civil Aviation Authority (NCAA) would have long sanctioned these airlines,” Nwokoma said.

He explained that Emirates had previously suspended operations due to trapped funds, and if their BASA was reviewed before their return, it was aimed at enabling them to operate more efficiently and confidently while addressing their earlier concerns.

The AFARN president however hinted that the majority of the foreign airlines sell tickets in naira, and no airline will deliberately contravene the rules of the country.

Read also: Price war on London route takes off as foreign airlines slash fares

Trapped funds’ measures

In 2023, when foreign airlines’ trapped funds in Nigeria reached $744 million, they introduced several measures to reduce delays in repatriating their earnings, which became a significant issue due to foreign exchange (FX) shortages and restrictions.

The measures included increasing ticket prices to hedge against future forex losses, selling tickets in U.S. dollars instead of the naira, and reducing the number of flights or seat inventory available in the Nigerian market.

Airlines also blocked low-ticket inventories, leaving high inventories to be sold in naira only, while the low-ticket inventories on most airlines’ websites could only be bought with dollar cards.

Nearly two years after the federal government cleared the trapped funds, some foreign airlines have continued to sell tickets in dollars.

Foreign airlines criticised

Susan Akporaiye, managing director and CEO, Topaz Travels and Tours, told BusinessDay that airlines still selling tickets in dollars have absolutely no reason to continue to do so. “Personally, it’s a total disregard and lack of respect for our country Nigeria,” she said.

‘No reason to do so’

Akporaiye, who is also the former president of the National Association of Nigeria Travel Agencies (NANTA), further said that the practice could result in market marginalisation and naira devaluation.

Yinka Folami, current president of NANTA, told BusinessDay that even if BASA agreements were signed in the past, these agreements could be reviewed in line with current realities.

Folami described it as anti-trade, disrespectful, and harmful to the nation’s aviation industry.

Folarin stressed that such actions have contributed to the rise in ticket prices, further straining passengers and weakening local travel businesses across Nigeria.

He called on the Nigerian government to assert its sovereignty by mandating airlines to accommodate naira transactions in their booking systems.

“The naira is stabilising, and we must respect it. There’s no need for dollar-only trade in this market anymore,” Folarin said. “The Central Bank of Nigeria is on top of the situation, and there’s liquidity and transparency. We should be congratulating the CBN and assisting the government to support the naira.”

Folarin also warned against potential job losses if the practice continues.

Read also: Foreign airlines lost over 50% trapped funds to Africa’s currency devaluation – IATA

NCAA responds

Mike Achimugu, director, Public Affairs & Consumer Protection, NCAA, said the Director of Air Transport Regulations

has received similar reports of ticket sales in dollars and has commenced investigations into them. Achimugu said the director is writing to all airlines, noting that the findings will be made public.