Nigeria, travel agents lose over $400m to offshore ticket purchases

•  Job losses persist over $800 airlines’ trapped funds

The insistence by many of the international airlines for dollar payment for tickets and the skyrocketing airfares on the Nigerian routes occasioned by carriers’ trapped $800 million has resulted in losses to the economy estimated at more than $400 million.

Job losses equally persist as many of the travel agencies have cut staff strength over the purchase of tickets overseas and have devised a means of collaboration with overseas agents who take the bulk of the commission that should have accrued fully to the Nigerian-based travel agents.

The decision by many to purchase their tickets offshore because of the cost in Nigeria and the devaluation of Naira by over 45% in the last two years has seen the high rise of tickets sold outside the country and ticketed inside the country, otherwise known as SOTI to be on the rise and one that is damaging not only to travel agency business in the country but one that has stopped the government from earning the desired taxes from ticket sales as the taxes go to the agents offshore.

The Group Managing Director of Dees Travels and Tours Limited, and a front-line aspirant for the Presidency of the National Association of Nigeria Travel Agency (NANTA), Mr. Daisi Olotu said, “The Nigerian government is losing because when you take Naira out to buy dollar and send dollar to a different country to go and buy ticket that will originate from Nigeria, this is not good enough with is Sales Inside Ticketed Outside (SITO).”

“It is not good for our economy. Let the money go to Nigeria and let everything happen in Nigeria, let the travel agencies in Nigeria benefit from the money in Nigeria, and let the airlines that come to Nigeria benefit from the money from Nigeria.”

“The money they are taking out to buy those tickets from Nigeria will not even count for Nigeria sales as money that is generated from Nigeria by the airlines. All these are working against the country when it comes to people coming to Nigeria to come and invest.”

The delay by the government in releasing funds for the repatriation of the earnings of foreign airlines according to him is causing a degeneration in the aviation sector, evident in the skyrocketing fares, and the airlines’ threat to reduce or outrightly cease operations in Nigeria.

He reiterated that it is as a result of these high fares that Nigerians are purchasing their international tickets from other African countries and even non-African countries.

Olotu noted that the country may have lost over $400 million to this situation as many of the airlines as a result of their huge funds trapped in the country request that tickets be sold in dollars for easy repatriation of their funds as the country is foot-dragging in releasing the bulk of their money to them and are scared of seeing more of their money stuck in the country.

The release of $61 million he said falls short of the $812 million trapped funds, urging immediate action is crucial to prevent further deterioration of the aviation industry and its alarming effect on the country’s economy.

The Central Bank of Nigeria (CBN) had penultimate week released $61 million to the airlines; a situation many analysts described as a drop in an ocean, urging the government to live up to its responsibility and in line with the Bilateral Air Services Agreements (BASA) it has with many of the airline countries urgently defray the debt.

While some airlines still accept Naira for ticket purchases, the majority of the airlines prefer tickets to be paid in dollars while those paying with the Nigerian currency pay more than twice as much than tickets in neighboring countries like Ghana, Benin Republic, and Togo; a situation that had seen many Nigerians take a trip to those countries for their journeys.

While sympathizing with the carriers for the hiccups in getting their funds, he, however, dismissed the report of threat by the carriers to leave Nigeria over trapped funds matter, saying the carriers are finding the Nigerian route very juicy and one that is very difficult to stop because of the huge yield.

According to him, “The Federal Government is unable to pay some of the trapped funds; the airlines are shouting that they want to leave Nigeria. Lo and behold, there is no day airlines’ flight go out of Lagos is empty. What are they talking about? Are they deceiving us or deceiving themselves? There is a gap, so, we need to bridge this gap. We need to bring the airlines very close to the travel agents so that, we will now explain to the government. Our travel agency business is sitting on a tripod stand; that is, the government, the airlines and we the travel agents.”

Wole Shadare