Coronavirus: Nigeria’s travel industry shaky after N180 billion loss from pandemic

In depth
This article is part of the dossier: Corona Chronicles: 20 April – 24 April

By Ruth Olurounbi

Posted on Thursday, 23 April 2020 10:41
Nigeria Floating Currency
A money changer counts Nigerian naira currency at a bureau de change, in Lagos Nigeria. (AP Photo/Sunday Alamba)

Nigeria's fledgling tourism industry is losing money and many jobs are being cut as employees are unable to pay wages, raising fears that the industry could collapse by the time the coronavirus pandemic ends.

So far, African airlines have lost nearly $5 billion in revenue following the spread of coronavirus on the continent due to low passenger demand, according to a report from the International Air Transport Association (IATA).

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International bookings in Africa went down by 20% in March and April, while domestic bookings fell by about 15% in March and 25% in April, according to data from IATA.

Nigerian market

In the first two months since the global lockdown went into effect, the Nigerian travel industry lost more than N180 billion and thousands of jobs, according to Bankole Bernard, Chief Executive Officer of Finchglow Travels Limited/FCm Nigeria and former President, National Associations of Nigerian Travel Agencies (NANTA).

World wide, the deadly coronavirus could cut 75 million jobs in the travel and tourism industry, according to the World Travel and Tourism Council. In Nigeria, already some 24,000 jobs have been cut, while employees have ceased payments for those who still have jobs until business situations improve, according to players in the market.

READ MORE:Coronavirus: recession in Nigeria likely, despite measures in place

With the slump in sales, especially as the global lockdown drags on and the Nigerian government extends airport closures by two weeks to contain the spread of the virus, IATA-accredited passenger sales agents are facing a peculiar challenge of remittance shortages.

Closed airports and airspace

Nigeria expanded its restrictions on 21 March announcing it will close its two main international airports in the cities of Lagos and Abuja from 23 March for one month. On 20 April, the country of 200 million people closed its airspace and airports by two weeks, in an announcement by aviation minister Hadi Sirika.

“Since the arrival of the COVID-19 pandemic, ticket sales and packages have gone down significantly which makes it difficult to meet our bi-monthly payment obligation to IATA. The growing fear is that more than 50% of the travel and tourism business may likely collapse and more jobs will be lost if this continues and many travel agents lose their accreditations because they are unable to make payments,” said Kayode Adeshola, Executive Director, Capstone Travels and Tours in Abuja.

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“IATA is asking us to pay for all tickets issued before the lockdown as all weren’t used by passengers due to cancellations by airlines. If IATA is mandating us to pay for tickets issued why can’t the same IATA/Airline pay the agents back the value of all pending refunds applications with the airlines? We feel cheated.”

“We also need Airlines to cooperate with us by paying us back the refunds of unused tickets instead of the proposed voucher,”  said Adeshola .

Travel agents are asking for a bailout of N5bn to help manage the pandemic shocks, as the work on rebuilding passenger confidence after the pandemic is eradicated, said a top official in the travel association.

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