As dollar shortage in the Nigerian economy continues to hit the air travel industry harder, foreign airlines flying into the country have stopped local travel agencies and firms from selling tickets to intending inbound Nigeria passengers
The carriers also barred Nigerian travel agencies from selling tickets to intending passengers whose travel itineraries neither originate nor terminate in Nigeria.
This is known in air travel parlance as SOTO ticket, meaning Sold Out, Ticketed Out.
The move is currently affecting many Nigerian students abroad who are seeking to buy tickets from Nigerian travel agents to come home for the Yuletide.
Majority of them are now being forced to consider buying their tickets from travel agencies based overseas.
The latest move by the international carriers follows their inability to repatriate their ticket sale proceeds running into several billions of naira in the last one year.
As of October, the International Air Transport Association (the global trade body for international airlines) said foreign carriers operating in Nigeria had been unable to repatriate about $207m in ticket sale proceeds to their various head offices abroad.
The Central Bank of Nigeria is rationing the sale of dollar to international airlines and other sectors of the economy as the country battles to meet dollar demands.
However, economic and financial experts have queried the rationale for the CBN’s rationing of the greenback when the nation’s external reserves are still above $40bn.
Local travel agencies told our correspondent that most of the foreign airlines stopped sale of SOTO tickets due to the exchange rate problems in Nigeria, which they said had made it difficult for them to repatriate their revenues.
“Most airlines don’t want to sell SOTO tickets again because of the exchange rate problem in Nigeria, which is affecting them; they couldn’t move their revenue out of Nigeria,” an official of Peacock Travels and Tours, a major local travel agency, said on condition of anonymity because she was not authorised to speak on the matter.
The official of another agency said aside from the difficulty in repatriating revenue, SOTO tickets might not pay the foreign carriers because of the international exchange rate among countries.
Findings by our correspondent revealed that British Airways stopped local travel firms from selling tickets to inbound Nigeria passengers about two weeks ago. BA also barred the local firms from selling SOTO tickets.
It was further learnt that other carriers including Lufthansa, Air France and KLM had joined in barring local travel agencies from selling SOTO tickets.
According to foreign airlines and travel agencies, more international carriers take similar decision in coming days or weeks.
A British Airway official confirmed the development anonymously and explained that the decision was taken because IATA had told foreign airlines that SOTO tickets were putting more pressure on the Nigerian economy due to the increase in foreign carriers’ demand for dollars from the CBN.
“IATA confirmed to us that we (foreign airlines) are putting pressure on the Nigerian economy when we sell in naira tickets that are meant to be sold in dollars. An example is a London-New York-London ticket. That itinerary has nothing to do with Nigeria. But most passengers, especially Nigerians, prefer to buy those tickets from Nigerian travel agencies because it is cheaper. A lot of passengers who don’t even have business in Nigeria prefer to buy their tickets in naira because it pays them. So we had to take this decision to avoid putting more pressure on the naira,” a BA official said on condition of anonymity because there was no official approval to speak on the matter yet.
Lufthansa, Air France-KLM spokespersons could not be reached as of press time.
The President of the National Association of Nigeria Travel Agents, the umbrella body for travel agencies/companies in Nigeria, Susan Akporiaye, could not speak with our correspondent because she was on air transit as of press time.
The media aide promised to get back to our correspondent.
The lingering shortage of forex in Nigeria had forced the naira to crash against the United States dollar on the IATA platform last month.
As a result, airfares on Nigeria routes that are priced in naira had increased considerably.
The development came amid struggles by foreign airlines to access forex from the CBN to repatriate ticket sale proceeds running to over $208m.
I the naira had fallen against the dollar last month on the IATA ticket pricing template from 415/dollar to 444/dollar, forcing travel companies to sell tickets at higher prices.
Google set to invest $9.5bn in US
Google has announced plans to invest $9.5bn in its US offices and data centers around the country in 2022, up from more than the $7bn it spent in 2021.
According to CNN, the big bet on office space was coming at a point Google was embracing a hybrid work model. The Alphabet-owned company has called for many of its employees to work in an office three days a week after two years of being fully remote.
The Chief Executive Officer of Alphabet and Google, Sundar Pichai, said, “It might seem counterintuitive to step up our investment in physical offices even as we embrace more flexibility in how we work.
“Yet we believe it’s more important than ever to invest in our campuses and that doing so will make for better products, a greater quality of life for our employees, and stronger communities.”
Google said it would open an office in Atlanta this year and continue to develop and expand office space in Austin and New York. It added that it planned to continue investing in data centers in Iowa, Nebraska, and Tennessee, among other states.
As part of the announcement, Google said it expected to create at least 12,000 new full-time jobs at the company this year.
Google and other tech companies were among the first businesses to shift to remote work when the pandemic hit in early 2020. But that shift always appeared to be temporary. Like others in Silicon Valley, Google had previously invested billions in expansive campuses and lavish office benefits for workers.
European markets pull back amid doubts over latest Russian pledges over Ukraine
European stocks retreated on Wednesday following the latest round of talks between Russia and Ukraine, aimed at finding a solution to the conflict.
The pan-European Stoxx 600 fell 0.8% in early trade, with autos shedding 1.9% to lead losses, while oil and gas stocks gained 1.7%.
In terms of individual share price movement, Finland’s Nokian Tyres fell 6.6%, while Sweden’s Lundin Energy added 4.7%.
Investor sentiment was boosted on Tuesday following negotiations between Russian and Ukrainian officials in Turkey, at which Russia’s deputy defense minister claimed Moscow had decided to “drastically” cut back its military activity near Ukraine’s capital.
Alexander Fomin, who spoke following the talks in Istanbul, said Russia would slow its military operations near Kyiv and Chernihiv in order for peace talks to progress. Russia previously claimed that it would reduce military operations in other parts of Ukraine but then continued its advance.
Growing hope for a cease-fire appeared to boost investor sentiment Tuesday, as Dow Jones Industrial Average futures rose 200 points, or 0.6%. S&P 500 futures also climbed 0.6%, while Nasdaq 100 futures climbed 0.7%. Meanwhile, the price of U.S. benchmark West Texas Intermediate crude oil, which spiked on the heels of Russia’s invasion of Ukraine, fell more than 4% to $100 per barrel.
Doubts have set in over the pledge, however, and while the Russian military has begun moving some of its troops in Ukraine away from areas around Kyiv to positions elsewhere in Ukraine, Pentagon Press Secretary John Kirby warned the troop movements do not amount to a retreat.
Shares in Asia-Pacific were mixed in Wednesday trade as investors watch for developments surrounding the war in Ukraine. Stateside, traders are keeping tabs on a slew of key economic reports, while also monitoring the Federal Reserve’s planned interest rate hikes.
The Job Openings and Labor Turnover Survey on Tuesday showed 11.3 million job openings, higher than the 11.1 million expected. The ADP will also release its private payrolls data ahead of the closely watched monthly jobs report, on Friday.
Lagos Assembly kicks against harassment of residents by police
Lagos State House of Assembly Speaker, Mudashiru Obasa, yesterday, cautioned police in the state against harassment, intimidation and extortion of residents.
Obasa said this on the floor of the House when lawmakers honoured outgoing Commissioner of Police, Mr. Hakeem Odumosu, who has been promoted to Assistant Inspector-General, and is due to retire in January 2022.
Obasa said Odumosu was honoured as the first Commissioner of Police in the state to stand before the lawmakers and address Lagosians on his experience policing the state.
The Speaker thanked Odumosu for his openness and responsiveness to issues affecting the peace of the state.
“It is important to call on those behind you to know that the relationship between the police and the people need to be constantly improved upon,” Obasa said, adding that men of the Nigeria Police Force need to build more trust among the people.
“Everybody must be treated with respect, dignity and honour. And that is how we can earn respect. Policing should not be about harassment and extortion but building trust among the people and making them comfortable,” Obasa said.
The Commissioner of Police, who led a team of officers to the House, thanked the lawmakers for their support. According to him, nothing could have been achieved in terms of security and peace in the state without assistance of the House.
He said he would remain grateful to Lagosians for making it possible for him and his team to effectively manage the security of the state.
Odumosu, who described Lagos as ‘mini-Nigeria’, said proactivity of the Assembly led to the creation of laws that helped the police remain successful in the state.
He said the Cultism Prohibition Law also helped to reduce illegal associations in tertiary institutions in the state and enlightened property owners and residents.
“We promise to continue to excel in providing watertight security for people of the state,” he told the lawmakers. He also promised he would encourage his successor to sustain the relationship between the police and the House, while urging the lawmakers to extend their support to his successor.
“Policing Lagos is not a tea party. Without the laws in Lagos, it would have been difficult to police the state. Don’t get tired, don’t relent in making laws that would make Lagos maintain its place as the most peaceful state in Nigeria,” he said.
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