Emirates Airlines has re-entered the Nigerian aviation market, offering dollar-denominated fares that have sparked debate among industry experts and travelers alike.
The airline, which suspended services to Nigeria due to trapped funds, announced it will resume daily flights between Lagos and Dubai starting October 1, 2024, but with all fare inventories priced in U.S. dollars.
While the move has garnered applause for its competitive pricing, many are concerned about its potential impact on Nigeria’s foreign exchange market.
Checks revealed that Emirates’ fares, though in dollars, are priced competitively compared to other international airlines.
A return economy class ticket from Lagos to London Heathrow on Emirates costs $1,130, which amounts to ₦1.83 million at the current exchange rate.
In comparison, other airlines such as KLM, Air France, and Ethiopian Airlines have ticket prices ranging from ₦2.2 million to ₦2.7 million. This pricing strategy is seen as an effort by Emirates to regain a foothold in Nigeria, a key market for the airline.
However, not all are enthusiastic about Emirates’ decision to price fares in dollars. Susan Akporaiye, Managing Director and CEO of Topaz Travels and Tours, expressed concern over the impact on Nigeria’s already fragile foreign exchange market.
“This means people have to buy dollars in the black market to pay for tickets, putting more pressure on the foreign exchange market, which could lead to scarcity and further fare increases,” Akporaiye said.
Travel industry analyst Olumide Ohunayo noted that Emirates’ decision to charge in dollars might be a strategic marketing move but warned of possible risks.
“It may be a marketing gimmick to attract travelers with lower fares, but the real test will be when operations commence on October 1. The airline can’t afford to alienate travel agents and customers by bypassing traditional naira-based pricing,” Ohunayo stated.
Emirates had previously suspended flights to Nigeria due to complications arising from trapped funds and fuel supplier payments. The airline, unlike other carriers operating in Nigeria, pays its suppliers in dollars, while others pay in naira.
This mismatch was a significant factor in Emirates’ decision to pull out of the market in 2022. With its return, industry experts are urging Emirates to address these underlying issues to ensure long-term success in the Nigerian market.
Critics also raised concerns about the potential impact on Nigeria’s sovereignty, with many questioning the decision to prioritize the dollar over the local currency, the naira.
Yinka Folami, President of the National Association of Nigerian Travel Agencies (NANTA), stated that while the fares might be competitive, charging in dollars undermines Nigeria’s legal tender.
“Nigeria is a sovereign nation, and it deserves respect. Pricing tickets in dollars puts unnecessary pressure on the naira and the forex market,” he said.
Despite the concerns, some industry insiders believe that Emirates’ re-entry will benefit travelers by increasing competition and providing more affordable options.
A return business class ticket from Lagos to Dubai on Emirates, for example, costs $4,418 (₦7.1 million), which is competitive with other carriers such as Turkish Airlines and Qatar Airways, whose fares are in the same range but often higher in naira.
As the October 1 launch date approaches, analysts will be closely watching how Emirates navigates Nigeria’s unique challenges, including foreign exchange volatility and the complexities of pricing in a dual currency environment.
Whether this bold move by Emirates will result in a long-term strategy or a short-lived experiment remains to be seen, but for now, the airline has certainly reignited conversation in Nigeria’s aviation industry.