International airlines have raised the foreign exchange (Forex) rate in their ticket charge for international travel, a move that could lead to a reduction in passenger volume.
The foreign airlines have reportedly increased the rate charge for their flight ticket from the Central Bank of Nigeria (CBN) rate of N444/$1 to N551/$1.
This is also 18.8 per cent or N87.5 kobo more than the forex rate (N463.50/$1) in the official market as of Monday, 3 March 2023, according to data obtained from FMDQ Exchange.
The move is reportedly driven by the foreign airlines’ inability to access forex easily from the central bank to repatriate their ticket funds, with the other option being the black market, where the forex rate is above N700/$1.
According to a report by Nairametrics, the international airlines increased the forex rate two weeks ago, putting an end to the three years reign of the N444/$1 the CBN sells the forex to them.
Prime Business Africa previously reported that foreign airlines have been unable to repatriate their ticket sales from Nigeria due to the scarcity of Dollars in the official market and the cost of buying the USD from the black market.
Foreign airlines’ funds trapped in Nigeria are above $700 million, from $464 million in July 2022. Nigeria is the country with the highest international airlines’ trapped funds in the world.
The Group Managing Director of Finchglow Travels, Bankole Bernard, had also confirmed the hike in the foreign exchange rate for international tickets, stating: “Today, the rate at which we are issuing tickets is N551 to a dollar.
“Is that the official rate? No, but that is the rate we are issuing tickets, which is moving closer to the black market. This means the issue of trapped funds would not have been if it had been properly managed.
“The funds became trapped because we were not ready to give them at the official rate. Why didn’t you come out all these while and tell them the rate you would give the airlines so that they can sell their tickets at particular rates as long as it is official? After all, we have multiple exchange rates.
“So, what will make this one different? Then, there will not be an issue of trapped funds and people will be able to do their business, and the agony that you are putting a lot of travellers to will not be there.”
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