Foreign airlines operating in Nigeria have begun to unblock their low-priced fares on Nigerian routes as the Central Bank of Nigeria completes the payment of about $7bn backlog, which includes over $700m unremitted ticket revenue.
The CBN had about two weeks ago announced the completion of payment of $7bn legacy debt, which included FX forward contracts among foreign exchange-denominated debts.
The CBN, however, declared about $2.4bn of the $7bn debt invalid, saying it could not be verified due to improper documentation among other infractions.
The International Air Transport Association, the trade body representing foreign airlines, has yet to verify the clearance of the entire $700m but findings showed on Saturday that the foreign carriers had begun to unblock their low-priced tickets.
To maximise their yields, foreign carriers had over 24 months ago blocked their low-priced tickets on Nigerian routes after ticket revenue running to hundreds of millions of dollars became trapped in Nigeria.
The development led to a sharp increase in fares on the Nigeria routes and was exacerbated by the sharp depreciation of the naira against the United States dollar, with economy fares on popular destinations such as the Lagos-London-Lagos route going for over N3m.
The CBN began the gradual clearance of the debt but the new administration of the apex bank later fast-tracked the payment, leading to clearance of major parts of the debt between late last year and so far this year.
Following the CBN announcement of the clearance of the $7bn, findings revealed that most of the airlines had released their low-priced fares.
The development was confirmed by the Chairman of the National Association of Nigerian Travel Agents, Susan Akporiaye.
She, however, revealed that virtually all the foreign carriers opened their low fares before the CBN announcement of the payment of the $7bn about two weeks ago, adding that low fares were opened about two weeks before the apex bank announcement.
Akporiaye said, “All of them (foreign airlines) have opened up all the inventories before the final backlog of forex was cleared. It is not now that it was cleared. It was cleared earlier in March.
“It is the only airline that has not done that. All of them have opened up all the inventories before the final forex backlog was cleared.
“We had a few that had issues – the unverified ones. There were some transactions for which some documents were not available. They were unverified. And those that were not cleared in February because they were unverified are those that have just been cleared.”
