Travel and Tour agencies as well as domestic and international airlines operating in Nigeria are having a hard time keeping their businesses afloat as the crisis with the country’s currency, the naira, deepens.
Nigeria is facing its first recession in over twenty years brought on by the slump in oil prices. This has led to cuts in government revenue and chronic shortages of the US dollar.
As a result of the currency crisis, some airlines are reducing the number of flights to Nigeria while others like United Airlines and Iberia stopped flying to Nigeria earlier this year.
The Reuters news agency reports two other international airlines have announced plans to suspend flights to Abuja by next month due to falling demand.
Emirates Airlines has meanwhile announced that it will from October 30 suspend its four times weekly flight between Dubai and Abuja to ensure the best utilization of its fleet.
Chris Ndulue, Managing Director of Nigerian carrier Arik Air, said the main issue affecting airlines is the forex crisis.
“Basically, the biggest problem now is the foreign exchange issues and it impacts heavily on the airlines because of the high input of foreign exchange into the airline operations. A lot of the things are imported, a lot of the services are imported, so we depend so much on the foreign exchange. So it’s…. what that means is that our costs have increased, more than doubled in some cases,” he said.
Founded a decade ago, Arik Air is now West Africa’s biggest carrier by passenger numbers.
But to maintain this feat, Ndulue is on a quest for new investors to help grow his company rather than using internally generated cash or debt.
But the airlines are not the only ones in the travel sector bearing the brunt of the currency crisis.
Travel and Tour firms are watching their sales plummet by the day as ticket prices have shot up by an estimated 300 percent.
Lawrence Ehilegbu who is Chief Executive of Efficient Links Travel and Tours Limited says his sales have gone as low as 40 percent.
“Travel agents are not finding it funny because we have actually lost businesses… We have lost businesses in the sense that apart from airlines going, volume has dropped drastically because fares are too expensive, extremely expensive. Not too many families can afford, not too (many) parents can afford to buy tickets after paying you know expensive school tuition fees overseas and be able to buy flights ticket,” Ehilegbu said.
And as the holiday season approaches, Nigerians who travel abroad to visit their families are considering staying home.
With Nigeria in recession, the airline industry is not the only sector affected by the current economic situation. Various firms around the country have had to lay off workers, launching yet another crisis of unemployment.