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Despite the tough stance of the Central Bank of Nigeria (CBN) to stop foreign airlines from basing their fares on United States dollars, the carriers seem to have won the war with the apex Bank helpless in restraining them from doing so.
The CBN had last year warned the carriers to desist from charging travelers from Nigeria dollars on tickets, insisting that the nation’s currency is in Naira which is the legal tender for all monetary transactions within the country.
The carriers had maintained that charging fares in dollars would help them to minimize their trapped funds said to have risen to over $700 million.
But travel expert, Mr. Bernard Bankole told Aviation Metric recently that the idea to jettison Naira-based tickets had significantly reduced the amount of airlines’ trapped funds.
The Minister of Aviation, Senator Hadi Sirika recently said the Nigerian government would not hesitate to punish identified erring international airlines selling tickets in hard currency.
He added that the Nigerian Civil Aviation Authority (NCAA) had been instructed to swing into action by protecting the interest of Nigerians against reported airlines’ operations malpractices, adding that no violator, no matter how highly placed, would be spared.
According to him, findings at the government’s disposal, revealed that some of the airlines were refusing payment in naira and charging their ticket fares in dollars in violation of the country’s laws, while some others have blocked local travel agencies from accessing their websites for transactions, choosing to release expensive tickets.
Before now, international airlines had closed lower ticket inventories while introducing higher ticket costs which are now out of the reach of teeming Nigerian travelers.
Return economy air ticket to London from Lagos which hitherto goes between N400, 000 and N500, 000 now cost over N1.8 million and N2 million. It could cost more depending on the time of purchase.
The International Air Transport Association (IATA) which is the representative body for over 250 global airlines devised new means of basing the exchange rate for tickets allegedly on the exchange of Naira to the dollar at the parallel market.
But the group in a statement on Monday explained that the exchange rate applied to international flight tickets sold in Nigeria is not determined by IATA, stressing that, “ It is incorrect to describe them as the “IATA exchange rate”.
According to IATA, “Air fares for international flights from Nigeria are denominated in US Dollars and converted into Naira, the local currency, for sale in the Nigerian market. These conversions use the official prevailing exchange rate provided by the country’s financial system”.
It further noted that what it did simply was to apply the spot rate at which the Central Bank of Nigeria sells USD through banks to the market, at its fortnightly retail foreign exchange auctions.
“The rate is not static, i.e. if the rate at which the CBN sells USD goes up, the exchange rate applied to airfares will follow and vice versa”, it added.Google+