CBN forex policy sends airfares over the roof

The new foreign exchange policy of the Central Bank of Nigeria, CBN, has sent foreign travel airfare over the roof, sending tickets prices some 57 per cent higher.

This, according to reports, is because of the adoption of N283/dollar as the new interbank exchange rate for the conversion of flight tickets, which are globally priced in dollars, by the International Air Transport Association.

The hike in prices by international airlines may hamper summer travels by Nigerians, as prices are expected to increase further as the summer season peaks in July.

Findings show that an economy class ticket to Johannesburg from Lagos, which used to go for between N110,000 and N130,000, is now priced at between N170,000 and N230,000, according to information obtained from travel agents and airlines, representing 66 per cent increase.

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A return economy class ticket on the Lagos-London route, which used to go for between N250,000 and N450,000 depending on the class a passenger chooses to fly, is now priced between N350,000 and N750,000 for various airlines plying the route, representing about 57.1 per cent increase in fares.

Also the Lagos-Dubai route that formerly witnessed a return economy ticket going for between N130,000 and N180,000, now goes for between N220,000 and N320,000, depending on the carrier a passenger chooses to fly, representing about 74.1 per cent increase.

Findings further showed that apart from the increase in airfares necessitated by IATA’s decision to increase the exchange rate for the pricing of airfares from N200 to N283, the international carriers were also rushing to recoup the losses caused by the months of delay in repatriating their sales proceeds.

Speaking on the development, a travel expert and Managing Director of Airlines Logistics Management and Support Limited, Chief John Adebanjo, said: “The interbank exchange rate moved from N197 to over N280 per dollar two Mondays ago. This is why IATA moved its exchange rate for the conversion of flights tickets from N200 per dollar to N283 per dollar for the pricing of international airfares.

“You know that airfares are priced in dollars. This amount will keep changing in line with the daily changes at the interbank forex market.”

Speaking in the same vein, Chief Executive Officer, Gadshire Travels, Mr. Gbenga Adebayo, said international airfares are usually priced in dollars and, as such, the increase in the interbank rate is expected to lead to a rise in airfares.

He however said, he believes that after the summer travels, airfares will come down.

“Moreover, as foreign airlines recover from the losses incurred from the months of delay in repatriating their ticket sales proceeds, airfares will drop; we hope,” Adebayo added.

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