Nigeria’s policy on funds transfer out of the country is causing ripples in the airline industry as Hahn Air a leading provider of distribution services for air, rail and shuttle partners and ticketing expert for travel agents has temporarily suspended its sales of ticket stock in Nigeria until further notice.
Most firms operating in Nigeria including airlines are complaining that they are unable to repatriate their earnings, which is a major plank of the bilateral air services agreement signed between their home countries and Nigeria.
Hahn Air Systems was founded in order to offer other airlines their own Computer Reservation Services (CRS).
The Hahn Air (airline) operations went through International Operational Safety Audit (IOSA) certification for the first time in 2007, and entered the Japanese and Korean markets by connecting to the Axess, Infini and Topas reservation systems.
Hahn Air, which is called virtual airline, represents some Nigerian airlines that are not on the Billing Settlement Plan (BSP). They use their code to get tickets on any airline.
BSP is a system designed to facilitate and simplify the selling, reporting and remitting procedures of International Air Transport Association (IATA), accredited passenger sales agents, as well as improves financial control and cash flow for BSP Airlines.
A truly worldwide system: at the close of 2014, there were BSP operations in 181 countries and territories. The system currently serves 400 participating airlines with an on-time settlement rate of 99.98 percent.
In 2014, IATA’s BSP processed $255.7 billion.
A statement by the firm said, “We regret to inform you that due to present difficulties in Nigeria with repatriation we are closing the market. We hope to be able to re-open our ticket stock for sales soon.
“We thank you for your understanding and apologise for any inconvenience this may cause. As of today, Hahn Air has temporarily suspended its sales of ticket stock in Nigeria until further notice. This new ticketing policy comes into effect on February 29, 2016 at 12:30 CET.”
“We kindly ask you for your patience and hope that we will be able to re-open the sales of our HR-169 tickets shortly. We will send you a notification as soon as our ticket stock is available for cash sales again. Please note that HR e-payment and UATP cards may still be used during this suspension.”
Following the difficulty of repatriating earnings from Nigeria, some foreign airlines began restricting fares from Nigeria, thus indirectly causing fares to become expensive, especially on second tier routes from Lagos, like, London – Atlanta, New York, Miami, São Paulo, Houston; or Frankfurt – New York, Chicago, Los Angeles, Shanghai, etc.
Restrictive fares on such routes, which made flying more affordable are no longer published locally by the airlines, but have unrestricted published fares, which are expensive.
An airline told BuinessDay that it had over N80 billion stuck in banks, which it is unable to repatriate.
He said, “You know the airline industry relies heavily on cash to meet its commitments. This has become of serious concern to us. Our fear is that the pressures on the Naira will likely lead to a devaluation which will erode our funds in Nigerian banks by about 35-45 percent. And we want to avoid this risk.”
The parity between the official exchange rate and the official rate is a humongous.
This has increased the risk of business especially for foreign investors in Nigeria.
At the moment travellers are paying premium fares to travel out of Nigeria, either using their foreign credit cards or paying through relatives abroad, while paying back in Naira equivalent through surrogate local bank accounts.
IFEOMA OKEKE
