Nigeria’s neighbour, Ghana, is reaping bountifully from aviation, as passengers now fly to Europe, United States and other parts of the world via Accra, making the nation to lose annually about N100 billion in taxes and other ancillary services.
Aviation experts said the development where travellers go to Accra to catch international flights would hurt the sector in Nigeria and, by extension, the economy.
They added that it is also a reflection of the slowdown in consumers’ purchasing power and, by extension, the broader economy.
They put the country’s loss annually at approximately N100 billion in taxes and other ancillary services that are going to the coffers of Ghana.
Former President of National Association of Nigeria Travel Agencies (NANTA), Alhaji Aminu Agoha, said that Nigerian travellers are now developing the Ghanaian economy.
He lamented that travel agencies in Ghana are making huge sales from the Nigerian travellers while most of the Nigerian agencies are folding up.
The decision to travel to Europe and other parts of the world via Accra for passengers from Nigeria is worsened by the carriers’ actions, especially American carriers such as Delta, United, which now demand US dollars for the purchase of tickets; a clear departure from the past where tickets were purchased in naira.
This is also coming at a time when virtually all the foreign airlines operating to Nigeria have increased fares by over 100 per cent, compared to Ghana, which still charges about 50 less of the fares charged travellers from Nigeria.
Findings show that these airlines now charge an average sum of $2,500 for a Lagos-New York economy class return ticket, while from Accra, it costs $1,500 or less if the fares are promotional.
For instance, a British carrier charges $10,070 for a First Class flight ticket from Abuja to London, while passengers flying from Accra to London pay $4,943 for the same class of ticket.
Abuja-London Premium Economy ticket costs $3,208, while Accra-London ticket of the same category is $2,240. The Economy ticket on the same flight costs $2,140 from Abuja, but $1,156 from Accra.
Lufthansa’s rate for Abuja-Frankfurt Economy class ticket is $3,661 while Accra-Frankfurt on the same class of ticket is $1,330. Alitalia charges $863 for one of its Accra-Rome Economy tickets but $1,509 for the Lagos-Rome equivalent.
Industry watchers say that the implication of this is that passengers who are unable to access forex at the official rate (N200 per dollar) will be left with the option of paying for tickets in dollars using the elevated black market rates (N320 per dollar).
Also, checks revealed that a first class ticket to Las Vegas from Lagos is N1.8 million more than a first class ticket to the same destination from Accra.
A top official of a British carrier attributed the astronomical increase in fares between the two countries to airlines’ huge revenue that was trapped in the Central Bank of Nigeria (CBN), arguing that if their revenues would be delayed, they want to make sure that they do not lose the value of their fares.
The carriers are piqued over their $2 billion with the CBN, which they find difficult to repatriate. One of the carriers that spoke to this newspaper, but elected that his identity be veiled, said:
“When we (carriers) go there, CBN gives us just 10 per cent of what we have. The foreign airlines have complained that they need cash, which they use to buy fuel, pay for lease, catering and so on.
“You can only benefit from the promotional fares if you are using dollar-denominated cards, which means they are getting their money directly. So, these monies we are getting in piecemeal and if they devalue the naira now, the airlines will lose substantial part of their money trapped with CBN.”
Managing Director, AshtonDave Travels and Tours, Mr. Abiola Lawal, recently said that the situation portended serious crisis for the travel industry in Nigeria, adding that what was playing out would limit choices for travellers.
The situation, he said, was counterproductive for the sector. “It is not good for all stakeholders across the value chain. It is not good for airlines and it gives the country a bad image. It affects our reputation as Nigerians,” he said.
Lawal said that there is need for a stakeholders’ meeting on how to resolve the problem, which has seriously affected them, culminating in a sharp drop in passengers for the carriers. He said:
“This situation has a lot of implications for Nigeria and one that affects the value chain. When I look at the Global Distribution System (GDS), everything reads zero down. All the discounted fares have been taken off.”
He said no economy developed well where there is no free movement of people and services.
“It is not good when tickets are being restricted. This is a very strategic industry and we have no choice than to make it better,” he added.
Chief Executive Officer, Zigona Travel, Ngozi Ngooka, said that she could not explain why the airlines decided to hike fares at these hard times, but acknowledged that fares are higher compared to last year.
A former Managing Director of the defunct Nigeria Airways, who preferred anonymity, said the trade movement between Nigeria and Ghana, which had increased over the years, has made the West African country’s aviation sector to grow tremendously.
On fares disparity, he said Ghana offers travellers considerably cheaper fares than what is obtainable in Nigeria, adding that the difference, which is as high as 50 per cent would encourage anybody from Nigeria wishing to travel to London, United States and the Middle East to go through Accra.
The source corroborated Ngooka, saying foreign airlines’ tickets cost so much because of the elimination of promotional fares and other incentives, which were hitherto given to travellers.
Foreign airlines to Nigeria are already losing patronage, as many travellers are beginning to cut the frequency of their trips, while others are taking the Accra option, which helps them to save about 50 per cent of their tickets costs.
Some of the airlines’ booking and payment platforms, particularly that of Delta Airlines and United Airlines remain inaccessible for close to one month, as intending passengers could only pay directly in the airlines’ offices with dollars or pay outside the shores of Nigeria.
A frequent traveller who simply gave his name as Ade Joseph described his frustration thus: “I have been trying to book online for a Lagos-US economy class return ticket through Delta Airline for the past one week, but their website does not accept payment, meaning that one can only pay in their offices. When I got to their office, I was told categorically that I should pay $2,000 cash or pay from outside the shores of Nigeria.”
Joseph said he had to contact a friend in Accra who helped him to do his booking, which costs just $1,000 compared to $2,000 he was asked to pay in Nigeria.
He stated that immediately the booking was confirmed, he directed his friend to help him offset the bill, as he plans to travel to New York via the Kotoka International Airport, Accra.
Country Commercial Manager of British Airways, Mr. Kola Olayinka, has consistently maintained that prices are determined by market forces of demand and supply and not by legislation.
He said: “Prices are determined by the forces of demand and supply; let more airlines come in. Let more airlines fly into Nigeria many more times. Our skies are closed. Open up the skies and let more airlines come in.”
He stated that British Airways’ position on this issue has not changed. Olayinka stated that the disparity in fares between passengers going to London from Accra, Ghana and those travelling from Lagos to London is now minimal.
Olayinka said since market forces determine the prices of goods and services, British Airways places the interest and satisfaction of its customers first.
“That is why its fares are competitive,” he said.
Besides, he said the operating environment must be taken into consideration when discussing fare disparity. Other factors such as market size demand for premium and economy tickets must also be considered, he explained.
