Delta, United, Emirates get exemption to sell tickets in dollars

  • Under ‘Open Skies’, US currency is mode of transaction

 

Three international airlines operating to Nigeria are exempted from selling tickets in the local currency- Naira.

The exemption sets them apart from carriers that are required to sell air tickets in Naira as required by the country’s law.

Two of the airlines, Delta and United Airlines are United States-based carriers that sell tickets in dollars in line with the ‘Open Skies’ policy between Nigeria and the US.

There is a unique agreement that exists between the US and Nigeria which is a variation of the Bilateral Air Service Agreement (BASA) called the ‘Open Skies’.

Under the ‘Open Skies’ agreement, the official currency is the US dollar. There is a clause in there that states that under extreme circumstances if naira was a convertible currency; Nigeria could insist that they could pay Naira.

Unfortunately, it is not a convertible currency. That does not apply to European carriers. It is a direct agreement between Nigeria and the US.

Open Skies has been around. It is the same thing Delta had with the United Arab Emirates (UAE). Over the years, the UAE currency was not as strong.

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Delta Airlines took advantage of that clause to offer fares in the United States dollars which has helped the carrier to sustain its operations in the country and particularly to stem the excruciating pain of its funds in the country; a situation that seriously affected many foreign airlines operating to Nigeria in the recent past.

Delta’s Sales Director for Africa, Middle East, and India, Mr. Jimmy Eichelgruen at an occasion to mark the carrier’s 15 years of operations in Nigeria in 2022 admitted, “We collect in US dollars airfares out of Nigeria. That allows us to still operate as we have done for 15 years. So, we collect in dollars. If we issue a ticket in Nigeria, it is going to be paid for in US dollars”.

The third carrier, Emirates has begun to sell tickets in dollars both on their booking portal and across their sales points.

The Group Manag­ing Director, Dees Travels and Tours Limited, Mr Daisi Olotu who spoke to Aviation Metric alleged that the new arrangement, particularly with Emirates that resumed flight operations to Nigeria after two years hiatus was one of the conditions Emirates gave to return to Nigeria.

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He said that before now, the agreement to sell tickets in dollars only ex­empted airlines from the United States, but disclosed that Emirates has joined the fray.

He said, “Only US airlines before now were allowed by law or policy to sell air tickets either in naira or dollars from Nigeria, but Emirates has equally joined.

Since the trapped funds saga about three years ago that was recently resolved by the government, the US carriers have been selling air tickets only in dollars to the fly­ing public.

While some have kicked against this, other stakeholders have backed the decision of some airlines to sell tickets in dollars.

This is coming amid concerns from travellers that Emirates sells tickets in dollars.

Just recently, the National Association of Nigeria Travel Agencies (NANTA) vowed to meet with representatives of Emirates to deliberate on the airline’s decision to sell tickets in dollars to Nigerians.

The former President of NANTA, Susan Akporiaye, expressed frustration over the situation, saying, “Emirates cannot come out in the open and say they want to sell in dollars without authorisation. They will be sanctioned. Transactions in Nigeria should be done in our local currency; that is the law.”

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While NANTA is piqued by Emirates action, aviation experts backed Emirates Airlines’ decision to charge passengers in dollars, citing the airline’s dollar-denominated costs and easier way of repatriating their money.

They supported Emirates Airlines’ choice to bill customers in US dollars, pointing to the airline’s expenses denominated in US dollars.

They argued that given the financial pressures faced by foreign airlines operating in the country, charging in dollars was a practical response to the ongoing economic challenges.

Not a few believe that it would be convenient for airlines to sell tickets in dollars to avoid the problem of repatriation of their money; a situation that caused problems between Nigeria and the International Air Transport Association (IATA), representative of the foreign airlines over over $800 million owed them.

Emirates A380 aircraft set for take-off

The Federal Government had in June this year given the carriers their fund, leading to the opening of lower ticket inventories that led to cheaper airfares for travellers.

Wole Shadare

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