Africa: Summer bookings spike as Nigerians start flying again on improving economy

Africa states aviation carriers AON IATA

Bookings for the 2017 summer holiday season, which started on an unimpressive note towards the end of the first quarter of this year, is beginning to spike as most commercial banks increase the limits of spending by Nigerian holiday makers abroad.

The development, which is occasioned by the improvement on dollar liquidity in the economy, has increased the access to fund and spending power of would-be holidaymakers, many of who declined overseas holiday trips last summer due to restrictions on the spending limits abroad by most banks.

From $100 monthly spending limit while on vacation, Guarantee Trust Bank has increased its spending limit to $1,000 monthly on its naira card starting from July 10, 2017. As well, Fidelity Bank has announced the resumption of international transactions on debit cards and raised the monthly international spend limit on its Naira Visa Credit and Debit Cards to $1,000.

“We are pleased to remove the restrictions on international transactions on Fidelity Visa Naira Credit and Debit Cards. It was important for us to take advantage of the slight ease in sourcing foreign exchange to do this in order to meet the yearnings of our teeming customers,” Nnamdi Okonkwo, Fidelity Bank CEO, said.

Ecobank Nigeria also announced the availability of its naira denominated MasterCard for international transactions as well as increased daily limits customers could spend on their cards for international payments on Point of Sale (PoS) and online channels from $100 to $1,000 for its platinum card customers. It also set $750 and $300 limits for its gold and standard cardholders, respectively.

In Addition to that, they have also enabled $100 daily ATM cash withdrawals on all the card variants.

United Bank for Africa (UBA) has also increased the limit on its cards to $2,000 per month. But all the banks have unlimited spending limits on their dollar denominated cards.
With all these enablers are in place, customers can now get dollar cards including credit, prepaid or debit cards from their banks for transactions abroad.

However, the development is changing the narrative for related businesses, especially airlines, travel agencies, tour operators and destination managers who are now making fortune from the spike in summer bookings.

According to the National Association of Nigerian Travel Agencies (NANTA), ticketing for summer is very impressive, almost 50 percent over last year’s record due to the stability in exchange rate and gradual recovery of the Nigerian economy.

Also, comparing the volume of bookings last summer with this year, Kola Igbinosa, a travel agent, noted that his company had recorded 50 percent increase from outbound holiday trips, especially to Dubai and Seychelles.

Tour Brokers International (TBI), the largest travel and tour company in Nigeria, has also recorded an impressive volume of bookings when compared with their performance last summer, while Remlord Tours, an indigenous tour company, is experiencing swelling volume.
While many tour and travel companies attribute the positive development to the recovery of the Nigerian economy and stability of foreign exchange, their clients and would-be holidaymakers think the many summer promotions out there have provided them with cost saving options.

“Yes, business is recovering fast, but most would-be holidaymakers are still watching their pockets. So, cost determines where to go and how long people will stay for summer holiday outside their shores. Tour companies know this and are boosting summer sales with promotions,” Jemi Alade, a tour operator, said.

Beyond the promotions, the tour operators note that destinations with seamless travel experience, particularly hassle-free visa or easy air connectivity (which are part of cost saving), are also getting good share of the rebounding Nigerian outbound market.
Bearing cost in mind, Travelstart, Tour Brokers International, Remlords, among other travel agencies, are partnering airlines and hotels in some mouth-watering and pocket-friendly summer promotion packages, which many are responding to in great numbers.
Airlines are also responding to the boom. For instance, British Airways is smiling to the Nigerian market again as it brings back bigger airplane this summer.

The airline appears to be having back its customers in the Nigerian market as it moves to introduce a bigger and better Boeing 747 on its London-Lagos route from September, authorities of the airline have said.

This development is coming after one year of foreign exchange repatriation challenge, which forced the company to bring a smaller aircraft into the country in line with declining passenger traffic.

Kola Olayinka, the airline’s commercial manager in Nigeria, said each of the Lagos Boeing 747 fondly referred to as the ‘Super High J Aircraft’ within the BA’s family would have 14 seats in its first class, 86 in business class, 30 in world traveller plus and 145 in world traveller.

“The new aircraft are larger than the Boeing 777s which the airline currently operates and will add an extra 343 seats a week on the busy route between London and Nigeria’s commercial capital-Lagos,” Olayinka said.

As well, Ethiopian Airlines, the largest African carrier, is flying Nigerian summer holidaymakers to top destinations across the world for less. The airline is encouraging more Nigerians to travel this summer by offering seamless travel and cheaper fair from the comfort of its four destinations in Nigeria to any part of the world.

As well, Emirates is partnering tour operators such as TBI to fly Nigerians to UAE destinations at cheaper rates.

It would be recalled that between January 2016 till April 2017, airline had challenges repatriating their earnings in Nigeria to their home countries. This led to the exit of Iberia Airline and United Airline from Nigeria.

However, the market is gradually coming back again. Comparing passenger traffic in May 2016 and 2017, which is when most bookings for summer are confirmed, the Federal Aviation Authority of Nigeria (FAAN) said it had seen a 9.15 percent increase in outbound traffic. While about 223,531 passengers travelled for outbound destinations in May 2016, 243,994 went for same purpose in May 2017.

Source: businessdayonline.com

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