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Cross border trading in air tickets is a red flag — NANTA

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THE National Association of Nigeria Travel Agents (NANTA) has raised the alarm over the high rate of cross border ticket trading among travel agents, which has caused huge losses to customers and its members.

NANTA’s alarm is based on the complaints from members of the association.

In a statement signed by NANTA’s president, Yinka Folami, titled, ‘Cross Border Trading in Air Tickets is a Red Flag: Nigeria Should Avoid it,’ the association called the attention of the government to the frequency of reports about the huge losses incurred by travel agents, running into several millions of naira.

The NANTA leadership attributed the cases to the non-refundable status of cross-border tickets and the poor service that is associated with them.

Folami said: “It is urgent to serve this notice on cross-border trading because of the alarming frequency of reports about huge losses incurred by travel customers through the purchases by some of our members.

“These losses, that go as high as N25 million from some of the cases that have been reported to us, are mostly due to the general non-refundable status of cross-border tickets and the poor service that is associated with them.

“The development has been traced to some factors ranging from highly restricted tickets, changing taking longer because of delayed communication due to time zone differences and incidences of no-show, which are high since communication is delayed and sometimes absent.

“No matter how lucrative your initial purchases of cross-border tickets have been, one problem would wipe out all your previous profits, make you heavily indebted to the customer and send you to the police/law enforcement as recent reports have shown.”

Speaking on the role of the International Air Transport Association (IATA) on ROE fixing, the NANTA president said contrary to what many think IATA does not fix ROE.

He, however, faulted the role of IATA in applying exchange rates and at the same time accused global merchants of undermining the Nigerian market, describing the roles of the two actors as being responsible for the present volatile environment in the sector.

While emphasising that cross-border ticket trading contributes to capital flight, poor customer service and the devaluation of local assets, the NANTA President said: “We have studied closely and can confirm that all the figures that IATA publish are from the FMDQ dashboard of the I&E FX window, with a two-day lag.

“However, this practice by IATA, applying ROE daily, which many times end up being significantly higher than parallel market rates, leaves room for speculation, encourages buying USD from the parallel market and purchasing cross-border tickets.

“All of these put further pressure on the naira, with harmful consequences on our market. This issue of ROE application by IATA is on the agenda of our discussions with government. We need to clarify if IATA is authorized to apply ROE daily, with a two-day lag. Pending that, it is instructive for IATA to note that the market is hurting.”

Maintaining that Nigerian travel agents were not against the entry of global players into the Nigeria market, Folami, however, cautioned that the global players have the responsibility to play fair and not to undermine the market.

“The executive council of NANTA frowns against the merchandise of global fares that are not available in our market. This results in declining local sales and deficit to all local players. We have promised government that we would fish out some of these global merchants and report them. The Nigeria market has lost about 40 percent share and this is not good for our Billing Settlement Plans (BSP) reporting. We advise them to stop eroding the Nigeria market,” he said.

He listed the implication and effects of cross-border trading to include capital flight, which is further weakening the economy, consumer effect of poor service and heavy, financial loss to customers.

Other effects include local asset devaluation and threat to all local industry players (airlines, GDS companies, travel agencies (big and small) will all lose). Airlines and GDS companies have confirmed heavy losses during our stakeholder visits and eventual heavy loss of Jobs.

The NANTA president, however, assured members that efforts were ongoing “behind the scenes to stabilise this market. Airlines, GDS companies and government have received our message on fair play very well. We are already seeing signs of relative stability and we are confident that we would get there.”

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