The travel industry in Nigeria has started going the way
of other countries of the world in terms of consolidation. Taking the lead is
the travel consultants popularly known as travel agencies. Confirming the step
at the weekend to Aviationages, Mr. Yinka Ladipo of Dart Logistics who is also the Vice
President, Lagos Zone of the National Association of Nigerian Travel agencies,
NANTA said it is true that the travel agencies in Nigeria are embracing merger to
form stronger operations . “It is
actually true. Consolidation is a necessity with the way the airlines are coming
with all kinds of policies. For example, the removal of commission called The zero per
cent commission era. It very difficult for agencies to survive under the zero
per cent commission era . But before now it was the commission we receive from
the airline that we use in taking care of our overheads and all our expenses.
The consolidation is necessary. Without the consolidation it will be very
difficult to survive in the business. For the numbers of agencies we have, if
an agency stands alone it tends to lose a lot.
Four major players in the business Dees Travels, Finchglow
Travels, Quantum and Touchdown have merged to set the ball rolling. The NANTA
Vice President Lagos Zone also confirms this merger by the travel agencies
mentioned. “Just as you have mentioned, It is no longer secret that these
travel agencies have come together to form one.
With the trend we are witnessing of the consolidation, at the end of the
day we might likely have just 15 travel agencies in Nigeria in years to come ”-he
said.
Expatiating further, he said : “Consolidation is when
two, three or more agencies as possible come together to relate with the
airlines. For instance, Let me say five agencies coming together the sales per
billing period (Per Billing Period is every two weeks), we have a sale of some
million naira. I have a sale of 150, C have a sale of 170, by the time we put
our sales together instead of me standing alone with my N150 million sales.
When we all come together with our sales, we can actually give an airline N700
million sales per month. We can meet with the airline and negotiate our
discount percentage. The airline can say it will pay 10 per cent while we ask for 15 percent.
At the end of the day we agree at 10 per cent. We will have something to show
for it instead of collecting 5 per cent on individual sales. With the
consolidation thing, everybody will benefit because the five of us coming together
we have a good deal. Other smaller agencies that do not have as enough volumes
as we do can come under us and start buying the tickets through us. Instead of
just collecting service charge, when you buy from us, you will get discounts.
You will realise that the N700 million giving to the airline every month can
increase to N1 billion in two, three months down the line. At the end of the
day, it is a win-win situation for all the stakeholders: the agencies, airlines
and the passengers because the passengers will pay less ”.
Explaining on possible impediment, Mr. Ladipo said before
you can go into consolidation, you need to go in with the people of like-minds.
It is a business of trust because there is a lot of money involve. “There are
more advantages than disadvantages. The issue of credit sales is a major
problem. As much as possible, the agencies involve in this merger must reduce
rate of credit sales even though we cannot do without it. We need to reduce the
duration since we pay airlines every two weeks. The agencies involve will still
maintain their names, IATA number, code. It is only the trading name with the
airlines that will change because all the agencies involve in consolidation
will trade with one agreed name”. -said he
In order to carry other member along Mr. Ladipo said
sensitization is underway. “We are going to organise a seminar where we will
invite experts to explain all the issues. The consolidation thing is on in
South Africa and it is successful in Kenya. We intend to bring experts from
either of the two countries. We intend to bring in financial experts, legal
experts, tax experts. We will use this medium to explain, encourage and
persuade existing members and non-members to be part of this wonderful idea”-He
expressed.
Encouraging domestic airline operators in Nigeria, Mr.
Ladipo said the airlines need to sit together and look at what will work for
them that they might have more to gain coming together than standing alone.
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