Players in the Nigerian travel industry have attributed the aloofness of the Federal Government to the foreign airlines’ trapped funds in the country as one of the major reasons the crisis has continued to linger.
The analysts said that the airline operators were yet to receive the needed encouragement from the Federal Government on how the remaining over $300 million trapped funds would be repatriated from the country.
Mr. Chris Chukwuma, the Chief Executive Officer (CEO), Aviatech Nigeria said that the issue of the trapped funds was having a serious negative effect on the image of the country in the comity of nations.
Chukwuma challenged the Federal Government, the Central Bank of Nigeria (CBN), Nigerian Civil Aviation Authority (NCAA), Ministries of Finance and Aviation to hold a joint meeting with the International Air Transport Association (IATA) and the officials of foreign airlines in the country to address the challenge.
Chukwuma said that the foreign airlines are gradually reducing their frequencies to Nigeria in a bid to moderate the risk exposure, warning that if the issue was not resolved before the end of the month, most of the airlines would have reduced their frequencies by 50%, while job loss would also escalate in the industry.
Besides, the analyst reproved the Directorate of Air Transport Regulation (DATR), a department under the NCAA, which is statutorily responsible for the safety and economic regulation of the civil aviation industry in Nigeria for displaying an insensitivity so far to the plight of the foreign carriers.
He maintained that the department ought to have taken the lead in ensuring the airlines recover their trapped funds through consistent engagement with the Director-General of NCAA.
- “What airlines are doing now is to reduce their exposure because the money keeps coming in, but you cannot take it out. We have two ways of making income – direct sales and sales through the Global Distribution System (GDS), which is through IATA, but you are not receiving that one too.
- “So, at the end of the day, your money is hanging everywhere. You still pay the NCAA, the Federal Airports Authority of Nigeria (FAAN) and the Nigerian Airspace Management Agency (NAMA) despite the fact that you are not collecting your money. So, it is a big problem. If there are no foreign airlines, the Nigerian aviation industry will collapse. None of the Nigerian airlines can do 1% of what foreign airlines are doing.
- “The government engagement is poor. The National Association of Nigeria Travel Agencies (NANTA) shouldn’t even come into this if our civil aviation through its DATR that manages the Bilateral Air Service Agreement (BASA) arrangements that all the foreign airlines signed with the Federal Government is coming out with information, but they just sit in their offices without engaging anybody.”
Also, Mrs. Susan Akporiaye, the President, NANTA, said the government was killing its business with its silence and nonchalant attitude on the issue.
Speaking with our correspondent over the weekend in Lagos, Akporiaye insisted that the entire approach from the government lacked transparency, adding that no one is sure of the future.
According to her, efforts by the travelling agencies to engage with the Federal Government on the issues had proved abortive.
- Akporiaye further raised the alarm that the businesses of her members were on the verge of collapse as a result of the sordid situation, adding that some of them may be forced out of business in the coming months.
- “We have made efforts to engage with the government, but they have refused to open their doors to us. We have had an appointment with the Minister of Aviation on this issue, but it was cancelled even when we were there in their office. The government is not talking to anyone, which is bad,” he said.
- She appealed to the government to open a window of engagement by calling for a meeting with all parties involved, including NCAA and NANTA.
- She said this effort would douse the tension in the sector.
Foreign airlines not selling in dollars – NANTA
Akporaiaye, however, debunked the claim by the Minister of Aviation, Senator Hadi Sirika that some foreign airlines now sell tickets in dollars as a result of the current challenge.
According to her, none of the operators was selling in any foreign currencies but said their tickets were extremely high as lower inventories are locked.
“The airlines are our partners, but they are suffering just like us. The airlines need to compete on fares, but we have failed them. We have failed on the BASA agreement. We really don’t have any legal right to penalize any airline,” she added.
Sirika had alleged last week after the Federal Executive Council (FEC) meeting held in Abuja that some of the foreign airlines were selling flight tickets in US dollars.
He said the Federal Government would not hesitate to impose sanctions on any airline caught selling flight tickets in dollars.
What you should know
- The CBN had, over two weeks ago, approved the release of $265 million to the foreign airlines as part of their trapped funds.
- A breakdown of the figure shows that $230 million was released as special foreign exchange intervention while another sum of $35 million was released through Retail SMIS auction, but majority of them said they were yet to get the sums despite the announcement.
- This happened after the International Air Transportation Association (IATA) had revealed that the revenue belonging to foreign airlines in Nigeria that is being withheld from repatriation as of July 2022 is the sum of $464 million.
- Before the move by the CBN, Emirates Airlines had announced it will stop servicing the Nigerian market from September 1.
