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How unfair trade practices hamper travel growth in Nigeria, encourage capital flight, say FCCPC, NANTA

The National Association of Nigerian Travel Agency (NANTA) and the Federal Competition and Consumer Protection Commission (FCCPC) have expressed concern about the many of the tickets to fly in the country’s market that are generated outside the shores of the country popularly described as Sold Outside Ticket Outside (SOTO) or Sold Outside and Ticketed Inside (SOTI) even though international carriers have all released their lower tickets inventories for the Nigerian market.

They are equally concerned about the trend where foreign and domestic airlines have ticket sales points beyond the airports; a situation they said has encroached negatively on the business of travel agents in Nigeria.

They described the cross-border trading of foreign airline inventories, which has impacted Nigeria’s travel economy as a monster that must be tackled frontally and destroyed.

The situation, not a few said has affected the revenue that is supposed to accrue to the travel agents and country in taxes, thereby affecting the continued existence of many travel agencies.

Your airline ticket is a SOTO, (Sold Inside Ticketed Outside), Sold outside Ticketed Inside (SOTI), or Sold Inside Ticketed Inside (SITI) makes a big difference when it comes to fares. Due to special fare construction rules and regulations, tickets sold outside the origin country (SOTO) will incur additional fees.

For example, if a UK traveller buys their ticket in the UK but they’re travelling from New York to Los Angeles that will be a SOTO ticket. With regards to the location of these operations relative to the origin of the traveller, tickets may also be SITI, SITO, or SOTI, specifying inside or outside.

What these agencies based outside Nigeria do according to a travel expert who spoke with Aviation Metric is that they prefer to issue tickets originating from Nigeria, pay in Nigerian currency, the Naira but collect dollars from their clients.

The FCCPC Acting Vice-Chairman of FCCPC, Alhaji Adamu Abdullahi stated that the trend if left unchecked,  is dangerous,  worrisome, and an economic threat to the Nigerian economy which must be arrested before it negatively compounds the plight of the Nigerian travelling public and the livelihood of Nigerian travel trade professionals; engendering loss of jobs and also frustrating efforts to stop capital flights out of Nigeria.

The FCCPC boss, who spoke in Abuja on Wednesday during a courtesy visit by the President and Executive Council of NANTA to his office,  assured members of the organised travel trade group that his agency would tackle the monster headlong and restore sanity in the seemingly dysfunctional travel industry.

He equally expressed worry over incessant flight delays and cancellations that have taken the joy out of air travel in Nigeria.

“We shall be very thorough in this engagement and other noticeable infractions in the aviation sector, particularly about airline operators treating passengers as if they don’t matter. It is sad to just cancel or delay flights without carrying passengers along, and if you must cancel flights or cause it to be delayed beyond a reasonable time, such operator must show us evidence of operational difficulties.”

Abdullahi commended the leadership of NANTA for the foresight to engage and partner with FCCPC to enthrone equity and fair play in the Nigerian travel economy, noting that a technical committee would be set up by the Commission to work out terms of a memorandum of understanding (MOU) with NANTA to help sustain the relationship.

“NANTA has shown capacity and technical knowhow on the best way to organise and manage the travel trade market, and we at FCCPC can only encourage this patriotic zeal by being partners to sustain a credible and efficient business climate sensitive to global expectations and extant regulations in the industry.”

“We cannot understand why foreign airlines would leave the airport vicinity and open trade offices in city centres, undermining the operations of registered travel trade professionals. These are issues before us, and we will approach them through detailed investigations and dialogues where necessary.”

President of NANTA, Mr Yinka Folami disclosed that the association was at FCCPC to commend the management of the consumer protection agency for helping to stabilise the fragile and troubled Nigerian travel sector, particularly during the foreign airlines trapped funds saga, which created and brought about untold hardship on Nigerian travelling public and the travel agents, causing a dip to about 40% loss in the Nigerian travel market.

“We are worried about the dip in the market values of our business, particularly through cross-border trading (unfair encroachment of global point of sale fares) by merchants that can be fished out and punished as their unwholesome activities have led to capital flight out of the country, exposed Nigerian consumers, trade professionals, and even foreign airlines operating in Nigeria to huge loses”.

Folami further stated that NANTA was worried that such unfair trade practices could complicate the growth of small and medium-sized enterprises in Nigeria, factoring in job losses and impacting on GDP of the country.

At the meeting were the immediate past president Mrs. Susan Akporiaye, and Mr. Bolu Agbaje, partner in Pinheiro LP.

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