- Title: Travel business hurts as Nigeria's currency crisis deepens.
- Date: 26th October 2016
- Summary: LAPTOP SCREEN SHOWING FLIGHT SCHEDULE
- Embargoed: 10th November 2016 11:35
- Keywords: Airlines Forex Dollars Flying Holidays Business Economy Arik Oil Fuel
- Location: LAGOS, NIGERIA
- City: LAGOS, NIGERIA
- Country: Nigeria
- Topics: Currencies/Foreign Exchange Markets,Economic Events
- Reuters ID: LVA00255N60RB
- Aspect Ratio: 16:9
- Story Text: Airlines operating in Nigeria are struggling with the plunge in the local currency that has pushed up fuel bills and hurt their profits. Some airlines are having to refuel in neighbouring West African countries.
Nigeria is facing its first recession in 25 years, brought on by low oil prices, which has cut government revenue and created chronic dollar shortages.
Two international airlines have announced plans to suspend flights to the Nigerian capital, Abuja by next month due to falling demand as a currency crisis in Africa's top economy deepens.
United and Iberia both stopped services to Nigeria earlier this year.
Emirates Airline became the latest to suspend its four times weekly service between Dubai and Abuja starting October 30, a decision they said was made after a review of the airline's operations to ensure the best utilization of its fleet.
Chris Ndulue is the managing director of Arik Air, which was founded a decade ago and is now West Africa's biggest carrier by passenger numbers.
"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, so this means that it is a very difficult time for airlines in Nigeria now," said Ndulue.
The airline wants to expand internationally both to bring in more hard currency and to cushion the impact of the economic slowdown at home.
Ndulue says Arik wants new investors to help it grow rather than using internally generated cash or debt.
Lawrence Ehilegbu has been a travel agent for over 10 years. He says business has never been this bad with sales as low as less than 40 percent compared to the 80 percent profitability recorded last year.
He has often had to buy tickets through friends in other countries just to try and keep his customers.
"Travel agents are not finding it funny because we have actually lost businesses. We have 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. Some parents have had to drop or suspend you know, their word from going abroad to go and do you know... have their education completed," he said.
With over 300 percent increase in flight fares, families have also reduced the number of leisure trips they take.
Osagie Igiebor, a sales and marketing executive is breaking with tradition and planning to stay home for the holidays.
"Right now it is really way too expensive, the flights are not there and I have to change my plans. Probably, going back home or going somewhere else within Nigeria to just spend the holidays. So it's really pathetic it's a shame to. It's a shame and I just believe the government or the country should try and do something about it because it's really, really embarrassing," Igiebor said.
The economic situation has not only hit the airline industry, various firms around the country have had to lay off workers, launching yet another crisis of unemployment.
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