Market News

Foreign Airlines Earned $1.7bn from Ticket Sales in 2018 - THISDAY

JANUARY 11, 2019

BY  Chinedu Eze

Foreign airlines operating in Nigeria sold tickets worth about $1.7 billion from January to December 2018, THISDAY investigations have revealed.

The amount indicated that there was an increase in sales in the second half of 2018, buoyed by passenger surge during the yuletide, as the foreign airlines sold tickets worth $800 million in the first half of the year, against $900 million they earned in the second half of the year.

In 2017, total ticket sold by foreign airlines in the country was about $1.4 billion.

A combination of the figures for 2017 and 2018 showed that in the last two years, the foreign airlines earned $3.1 billion from ticket sales in Nigeria, excluding revenues earned from cargo movement into the country.

President of the National Association of Nigeria Travel Agencies (NANTA), Mr. Bankole Bernard, said collation from the International Air Transport Association (IATA) indicated that the total class of tickets sold within the period could even be higher.

However, the NANTA president told THISDAY that IATA would make the final announcement on the total tickets sold by the airlines.

“We are still waiting, you know the trading is done on IATA platform and it is at the end of the year that they would collate everything, because they have changed their system a little bit. So, we believe that by the end of January we should have the exact figure of trading for 2018. But I can only have an estimate which is over $1.4 billion,” he said.

Bernard explained that the cost of ticket for international travel in Nigeria is higher than what obtains in other West African countries because of government policy, inadequate infrastructure and poor services, including inadequate fuel supply and these inconveniences are monetised and added to the cost of ticket by airlines operating in Nigeria.

He explained, “The foreign operators can see the huge vacuum and they will constantly capitalise on it. I will not call it exploitation; they are not exploiting us; they are into business and they can see an avenue for them to make money and they are making money. If you speak with any of them they will tell you it is as a result of demand and supply. For instance, if an airline comes into Nigeria and there is no aviation fuel, the airline is going to fly to Ghana and quickly go and refuel. But guess what? That cost is going to be on Nigerian passengers. So, if the cost is going to be on Nigerian passengers definitely the cost of ticket to Nigeria or out of Nigeria is going to be more expensive than other places. Why? The reason is because we have not made available infrastructure that will support smooth operation.

“So, there are several reasons why the cost of tickets in Nigeria will be high. And movement is inevitable, Nigerians enjoy flying, they enjoy travelling from one point to the other. So, a lot depends on the government, if the government can help in the area of policy implementation that brings relief to the aviation industry then the economy has the tendency of even growing faster. If four aircraft should land on any of our terminal you need to see how rowdy the airport will be, it is almost unbearable. Why should it be like that?”

Executive Director, Zenith Travels Limited, Mr. Olu Ohunayo, told THISDAY that government must tinker with its Bilateral Air Service Agreement (BASA) in order to create opportunities for Nigerian airlines to compete with their foreign counterparts by introducing Fly Nigeria Act, which would make it compulsory for foreign airlines to partner indigenous carriers and share revenues from ticket sales.

According to him, Fly Nigeria Act would make it compulsory for anyone travelling on government expenses to patronise Nigerian airlines or their partners.

Ohunayo said by so doing, the local airlines benefit from revenues earned on ticket sales by international carriers.

He said the government can also back indigenous carriers and support them to operate international destinations by playing the inevitable aero politics on their behalf.

He decried the huge amount repatriated out of the country every year by foreign airlines.

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