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Foreign Airlines: Stakeholders advocate urgent repatriation of trapped funds

Some foreign airlines in Nigeria

The inability of foreign airlines operating in Nigeria to repatriate money accruing from ticket sales to their countries has generated wide reactions from many quarters.

Stakeholders in the aviation industry say the continued failure by the Central Bank of Nigeria, CBN, to facilitate the remittance of the foreign airlines’ trapped funds is a breach of the Bilateral Air Services Agreements, BASA’s Nigeria signed with these countries.

Foreign airlines operating in Nigeria are desperately seeking to get their money for tickets sold in naira into dollars to take back to their home countries.

In the second quarter of this year, the total amount was put at $450m but as of today, the International Air Transport Association, IATA says, as of July the amount trapped in the Central Bank of Nigeria, CBN is $464m.

This development has led to some airlines adjusting their modus operandi. This includes increased airfares, reduced capacity, and the introduction of a new mode of ticket purchase, all in a bid to avoid increasing the amount that cannot be retrieved now.

President, National Association of Nigeria Travel Agencies, Mrs Susan Akporiaye says, tickets as of today are over a million naira, and getting the tickets to sell for those who can afford them is difficult.

She said the effects of the trapped funds have taken a toll on travel agencies.

“We are being affected badly and for the airlines to be able to break even they stopped selling their lower inventories, the ones that are, are from N2m”. She noted.

Some of the foreign airlines are threatening to halt operations in the country and IATA in a statement, says, it’s warning the Federal Government that failure to restore timely repatriation will hurt Nigeria with reduced air connectivity proving true.

The President, of Aviation Roundtable Safety Initiative, ART, Dr Gbenga Olowo says a similar situation resulted in the mass withdrawal of foreign airlines from Nigeria in the 70s.

“And that led to the departure of your swiss air, Sabina, Scandinavian airline, Brazilian airline almost five airlines left Nigeria in the 70’s and almost 50 years now, we are still facing the same problem, where are we going to get a solution”. Dr Gbenga Olowo stressed.

A US-based Nigerian operator, Mr Femi Adeniji says this problem would have huge consequences on the industry as it will amount to a loss of confidence and trust in investment in the country.

Mr Adeniji said, “It does not give the country a very image, credit background, if you don’t honor your contract, agreement it tells in this side of the world and they would make life difficult for any Nigerian airline coming to their places, it is not a good precedent at all”.

To travel abroad, passengers from Nigeria go to the neighboring countries to get a better deal on tickets and fly from there. Such development leads to a loss of huge revenue for the Industry.

Mr. Bankole Bernard, Sindy Foster, and Alex Nwuba, all stakeholders, therefore, appeal to the Federal Government to expedite action on the release of the blocked funds for the sake of the traveling public.

“Government needs to address the issue, it in all of our interest, not just the airlines, it is in the interest of passengers, the industry and there are hundreds of millions of dollars and they cannot repatriate those funds”. They maintained.

As the aggrieved foreign airlines are making frantic efforts to get their funds released, stakeholders called for a mechanism to be put in place to prevent a recurrence.

Reporting by Nosa Aituamen; Editing by Tina Oyinsan