Two years after the federal government cleared foreign airlines’ trapped funds in Nigeria, airfares from Nigeria to various destinations have remained expensive.
The International Air Transport Association (IATA) recently reported that $1.3 billion in airline funds is blocked from repatriation by governments at the end of April 2025, with Nigeria missing on the list. This is a significant amount, although it is an improvement of 25 percent compared with $1.7 billion reported for October 2024.
Top 10 countries with trapped funds in IATA’s list include: Mozambique, XAF Zone, Algeria, Lebanon, Bangladesh, Angola, Pakistan, Eritrea, Zimbabwe and Ethiopia.
For two years, Nigeria has maintained a clean bill as the country is not among the nations owing foreign carriers.
In 2022, IATA revealed that Nigeria was top among the five markets with blocked funds worldwide. The list noted that Nigeria owed $551 million trapped funds; Pakistan, $225 million; Bangladesh, $208 million; Lebanon, $144 million; and Algeria, $140 million.
In 2023, foreign airlines’ trapped funds in Nigeria rose to $818.2 million, the highest of such a record in the entire world.
In swift response, airlines blocked low ticket inventories (cheap tickets), leaving highest inventories (high tickets) to be sold in naira. Low ticket inventories on most airlines’ websites could only be bought with dollar cards. This, according to the airlines, was in a bid to cushion the effect of their trapped funds in Nigeria.
However, two years after airlines’ funds were cleared, airfares have remained high.
Till date, three major foreign airlines – Emirates, Delta Airlines and United Airlines – have continued to insist that all ticket sales must now be in dollars.
Ticket prices
A six-hour, 40-minute economy class ticket from Lagos to London on British Airways and Virgin Atlantic, which cost between N700,000 to N1.3 million four years ago when airlines’ funds were trapped, now sells between N3.2 million and N4 million naira and N14.3 million and N16 million for the business class.
An economy class return ticket from Lagos to most airports in the USA cost between N800,000 to N1.5 million four years ago. It is now priced between N2.8 million and N4 million. Business class tickets on the same route cost between N7.6 to N11.5 million across various airlines.
Also, an economy flight ticket from Lagos to Dubai, which cost between N400,000 to N700,000 four years ago, now sells at N1.6 million to N2.5 million. Business class tickets on the same route cost N3.7 million to N6.5 million depending on the airline.
Rip-off or what?
However, while some stakeholders in the aviation sector have argued that foreign airlines continue to rip off Nigerians and exclude them on cheap ticket classes despite cleared trapped funds, others say ticket prices are determined by the exchange rate.
Seyi Adewale, chief executive officer, Mainstream Cargo Limited, said foreign airlines can get away with charging Nigerian passengers exorbitant fares and excluding the country from promo fares due to a weak competition.
“The only time in recent history that foreign airlines on the Lagos-London route reduced fares was when Air Peace entered this route. Its entry forced down very high ticket rates of foreign airlines operating on this route to the surprise of many, despite their claims (during the period) of lack of repatriation of their money and high exchange rate.
“However, this new entry threat appears to have tempered because the travelling size on this route remains very large and their frequent flier initiatives help them maintain a loyal critical mass or pool of travellers,” Adewale said.
He said Arab-based airlines appear not to be efficient alternatives due to the long hours of flight connections during the stop over and wait time that can be up to 18hours.
Adewale suggested that for fares to reduce in Nigeria, the federal government through its agencies such as the Federal Airports Authority of Nigeria, (FAAN), Nigerian Airspace Management Agency (NAMA), among others, may choose to lower taxes with negotiated lower airfare considerations with the foreign airlines.
FX seen as critical factor
Susan Akporaiye, managing director and CEO, Topaz Travels and Tours, argued that the exchange rate has continued to determine ticket prices, which explains the rise of airfares since 2020.
“Air fares are driven by exchange rates. Last year, when foreign airlines’ trapped funds were released, airlines took their time to release low ticket inventories because the exchange rate was still around N1,600/$ to N1,700/$.
She further explained now that the rate of exchange is over N1,500/S, it is expected that this would be reflected on ticket prices no matter how small.
BusinessDay tracked naira-to-dollar exchange rate from 2021 till 2025 and saw the rising trend. In 2021, the exchange rate was about N399/$. The rate stood at N423/$ in 2022; N645.9/$ in 2023; N1,479/$ in 2024, and over N1545 in 2025.
Exclusion from promo
The Nigeria Civil Aviation Authority recently complained that Nigerians pay the highest air fares in Africa but yet get shabby treatment from airlines.
Recently, Virgin Atlantic and British Airways, the two major UK carriers, ran new promo fares across several countries where it operates but excluded Nigeria from countries that would benefit from the promo.
These airlines recently advertised promo fares on their websites and sent mails to customers, encouraging them to be part of the opportunity. However, the same promos are missing on Nigerian routes.
“I have always said foreign airlines rip Nigerians off when the opportunity comes. However, when there is an opportunity for Nigerians to benefit, they are excluded. Remember that Legacy Airlines sold a Lagos-London economy class return ticket for as high as N5 million. When Air Peace started the route, the airlines slashed fares,” a travel agent, who would not want her name mentioned, told BusinessDay.
John Ojikutu, industry expert and CEO of Centurion Aviation Security and Safety Consult, told BusinessDay that there may seem to be discrimination but the lack of knowledge of what to do right and be part of the ‘community of international airlines’ is a major concern.
“Unless those in the administration of our government and the management of the agencies have a good understanding of the markets in the Bilateral Air Service Agreement (BASA), the foreign airlines will always take advantage of our lack of that understanding of the markets,” Ojikutu said.
To do this, he suggested that Nigeria must have government policy and comply with relevant safety and economic regulations for designating flag carriers, noting that these are what the foreign airlines’ home countries would recognise as partnerships in the BASA.
(BusinessDay)
