The decision by the Central Bank of Nigeria to devalue the naira has caused a significant increase in airfares, negatively affecting the summer holiday plans of many travelers.
The depreciation of the naira has led to a surge in airfares, making this year’s summer travel season less predictable and affordable. Airlines in Nigeria have been facing challenges with foreign exchange and aviation fuel scarcity, which have forced them to raise airfares.
The devaluation of the naira is a result of President Bola Tinubu’s promise to unify the exchange rates in the country, aiming to discourage arbitrage and attract more capital inflow. The floating of the naira initiated by the Central Bank of Nigeria has caused its depreciation, further exacerbating the situation. Additionally, international airlines have faced difficulties repatriating their revenues from Nigeria, resulting in blocked funds totaling $812 million as of April 2023.
The increase in airfares has affected both international and domestic travelers, making summer holidays unaffordable for many. The rising costs of fuel, maintenance, and operational expenses have compelled airlines to pass on the burden to consumers. This situation has led to concerns among travelers who had planned affordable summer getaways. Industry experts are calling for measures to stabilize the exchange rate and create a favorable business environment for airlines to alleviate the financial strain on travelers and the tourism industry.
Marketnews Thoughts: Overall, the devaluation of the naira and subsequent increase in airfares have disrupted the summer holiday plans of travelers, causing financial strain and limiting travel options. The situation highlights the need for economic stability measures and exchange rate policies that can restore affordability and support the resilience of the Nigerian tourism sector.