International airline operators in Nigeria may soon increase their airfares as the group has recently adjusted their exchange rates to ₦551/$1 from ₦462/$1.
According to a report by Nairametrics, the airlines made the adjustment to the exchange rate on their Global Distribution System (GDS) owned by Amadeus.
The GDS is an online ticket network or software which is prominently used in the travel industry. It majorly facilitates booking services for airline tickets, hotel rooms, car rentals, and other travel-related services.
The increase in the exchange rate which is about 16%, would definitely cause a hike in airfare prices as operators will need to adjust their ticket prices to reflect the new exchange rate.
Airfare Hike Looms As International Airlines Adjust Exchange Rate To ₦551/$1
This development comes amid the tussle between the international airlines and the Nigerian government over the non-remittance of over $700 million trapped funds belonging to foreign airline operators in Nigeria.
Foreign carriers operating in the country had recently threatened the FG and even warned that the situation may become worse as Nigerian travellers have been made to pay higher airfares pending when the FG settles the outstanding funds.
According to air travel experts, Nigeria has the highest international airfares as most of the foreign carriers have stopped selling the lower fares inventory in Nigeria.
According to analysts, there has not been any official link showing the Central Bank of Nigeria, CBN is privy to this increment but according to the International Air Transport Association, IATA, which is the body that regulates airline activities.
It also does not unilaterally determine the dollar-naira exchange rate used for ticket pricing by international airlines flying into Nigeria.
In the wake of the fall of the naira against the dollar on the international airlines’ ticketing platform in 2021, the body had revealed that the exchange rates published daily for the purpose of ticket pricing by international airlines flying into Nigeria were in line with the daily trading rates on the FMDQ Group Website.
Nairametrics also confirmed that on the official spot rate of the Investor and Exporter window of the FMDQ, the naira and dollar exchange rate sold for as high as ₦551/$1 for the second straight day, the lowest ever recorded