The Nigerian Civil Aviation Authority (NCAA) has announced a significant breakthrough for Nigerian air travelers, as they are set to benefit from reduced prices on international flights.

This welcome development follows successful negotiations conducted by the NCAA with international airlines operating within Nigeria.

Two weeks ago, Captain Chris Najomo, the Director-General of the Nigerian Civil Aviation Authority (NCAA), announced the establishment of a high-level committee. This committee is assigned the task of examining the various factors influencing international airfare prices to reduce them.

Michael Achimugu, the Director of Public Affairs & Consumer Protection at NCAA, announced this milestone through a post on his official account on Thursday. He revealed that after a prolonged period of elevated international airfare costs burdening Nigerian travelers, international airlines have collectively agreed to reduce their ticket prices.

Achimugu explained that following a year characterized by high international airfare costs burdening Nigerian travelers, international airlines have come to a collective agreement to decrease their ticket prices. However, he pointed out that there is one carrier that has not yet adhered to this agreement to lower fares.

He disclosed that this positive change is the result of strategic meetings led by Capt. Chris Najomo, the Director-General of Civil Aviation (DGCA), held on February 12th and 13th. These meetings aimed to negotiate more affordable airfare rates from foreign airlines for Nigerians.

“I am proud to announce that, after the meetings with international airlines on the 12th and 13th of February, all of the airlines – bar one, have reopened their low-inventory tickets for Nigerians to access lower ticket prices for international flights. Recall that most of these airlines had closed the low tickets to Nigerians for about a year, subjecting our citizens to only the highest possible airfares. But the swift intervention of Capt. Chris Najomo, DGCA, has eased the situation. More wins to come,” Achimugu’s post on X read.

I am proud to announce that, after the meetings with international airlines on the 12th and 13th of February, all of the airlines – bar one, have reopened their low-inventory tickets for Nigerians to access lower ticket prices for international flights. Recall that most of these… https://t.co/UNxy1geJHS

— Michael Achimugu (@mikeachimugu01) February 29, 2024

This move is anticipated to alleviate the financial strain on Nigerian travelers and make international travel more accessible. It signifies a proactive approach by the NCAA to address the issue of steep international airfares that Nigerian travelers have faced.

The announcement comes in the wake of Air Peace airline’s decision to lower airfares with its debut flight to the UK. Last week, Air Peace announced plans to commence flights to London Gatwick. Dr. Allen Onyema, the Chairman and CEO of Air Peace, said that the Air Peace London route was established to combat high fares from Nigeria to London, aiming to provide Nigerians with more affordable travel options.

Currently, direct flights to London from Lagos on economy class with British Airways cost approximately 788 pounds for a round trip, equivalent to about N2,357,900, while a one-way ticket is priced at 565 pounds, equivalent to N1,629,535. Similarly, Virgin Atlantic Airways offers round-trip tickets from Lagos to London at $1,460 (about N2,357,900) for the cheapest option.

Air Peace has announced that its Return Economy Class Ticket will be priced at N1,200,000, while a Return Business Class Ticket will sell for N4,000,000. Additionally, Nigerian students studying in the UK can access a special 15% rebate on the already reduced Economy fares.

Stakeholders in the aviation industry have hailed the development. They said the move by Air Peace and the collective decision of international airlines to lower ticket prices reflect a positive shift towards making air travel more affordable and accessible for Nigerians.

In a broader context, the reduction in airfare prices represents a significant victory for Nigerian travelers, who have long grappled with the financial strain of expensive international flights. High airfares have been a barrier to travel for many Nigerians, limiting opportunities for business, education, and leisure. By making air travel more affordable, these initiatives have the potential to stimulate economic growth, foster cultural exchange, and strengthen international relations.

Furthermore, the reduction in airfare prices is expected to have a ripple effect across the Nigerian aviation sector. Increased demand for air travel could lead to higher passenger volumes, which would benefit airlines, airports, and related industries. Additionally, stakeholders said they expect the affordable airfares to attract more foreign tourists to Nigeria, boosting the country’s tourism sector and contributing to job creation and revenue generation.

It is hoped that these initiatives will stimulate increased travel and positively impact the Nigerian aviation sector as a whole.

In a promising development for Nigeria’s foreign exchange market, Mr. Olayemi Cardoso, the Governor of the Central Bank of Nigeria (CBN), has announced that the remaining FX backlogs within the banking system are slated to be cleared in the next few days, potentially within a week and a half.

This announcement was made during a Foreign Portfolio Investor call organized by the Nigerian Exchange Group (NGX), where the CBN team elaborated on recent reforms aimed at rectifying distortions in the forex market.

Responding to inquiries about the current size of the FX backlogs and the steps being taken to address them, Cardoso disclosed that the CBN has already cleared its FX backlog in all banks except for five, which are expected to be resolved imminently.

“Basically what we have done with those is we have paid as much as we can to the point where we have cleared the backlog of all the banks save five. All the bank’s genuine and verifiable backlogs have been cleared save five,” he said.

The governor expressed confidence that the CBN would soon overcome the issue of forwards, indicating that within the next few days, the remaining backlogs would be resolved. He noted that he is committed to transparency and accountability, reiterating his track record of delivering on promises.

“I have tried as much as possible to be consistent on this matter. I don’t make promises I don’t fulfill. The last time I spoke on this matter, I was confident that within one month, we would be more or less out of it and I’m saying again that right now I think in the course of the next few days maybe a week and a half, this should be put behind us,” he said.

The clearance of FX backlogs has been a top priority for Cardoso, as underscored during his confirmation hearing at the Senate. Over the past several months, the CBN has made significant strides in addressing these backlogs, fulfilling the Governor’s commitment to resolving the issue.

In a previous press briefing following the first Monetary Policy Committee (MPC) meeting of the bank, Cardoso announced that the CBN had successfully cleared an additional $400 million of its FX backlog. Based on publicized figures, the remaining backlog is estimated to be approximately $1.8 billion.

Amidst the backdrop of Nigeria’s FX crisis, the announcement by Cardoso, regarding the imminent clearance of remaining FX backlogs has brought a glimmer of hope to the country’s financial sector. The FX crisis, characterized by severe shortages of foreign currency and a widening gap between the official and parallel market exchange rates, has plagued Nigeria’s economy for several years.

The FX crisis, which has set inflation at 29.90% height, has its roots in various economic factors, including declining oil prices, Nigeria’s overreliance on oil exports for revenue, and structural weaknesses in the economy.

As Africa’s largest oil producer, Nigeria’s fortunes are largely tied to the global oil market, making it vulnerable to fluctuations in oil prices. However, the nation’s misfortune has been tied to the shortfalls of its oil sector, with oil output declining significantly. The sharp decline in oil production in recent years has strained Nigeria’s foreign exchange reserves, leading to dwindling FX supply and exacerbating the crisis.

To address the FX crisis and stabilize the naira, the CBN has implemented a series of measures and interventions aimed at boosting FX liquidity and curbing speculative activities in the parallel market.

These efforts include: floating the FX market last year in a bid to create a unified exchange rate propelled by ‘willing buyer, willing seller’ policy. Also, the CBN regularly intervenes in the FX market through the sale of foreign currency to authorized dealers and end-users and arrest of perceived speculators. For instance, the apex bank recently approved the sale of $20,000 to Bureau De Change operators, following the raids conducted by joint security agents across the country.

These intervention sales aim to stabilize the naira, bridge the gap between the official and parallel market rates, and meet FX demand for critical sectors such as manufacturing, agriculture, and healthcare.

Despite these interventions, FX backlogs persisted within the banking system, posing challenges for businesses, investors, and individuals seeking access to foreign currency. The clearance of FX backlogs has thus emerged as a priority for the CBN, with Cardoso emphasizing its significance during his confirmation hearing at the Senate.