The Association of Foreign Airlines and Representatives in Nigeria (AFARN) has accused the Federal Government of violating the Bilateral Air Service Agreement (BASA) arrangements it signed with various airlines following its continued withholding of foreign airlines’ ticket sales earnings.
AFARN said it was high time the Federal Government sat down with the affected airlines to reach an agreement on how to facilitate the repatriation of the funds which are now over $600 million.
The President of AFARN, Mr. Kingsley Nwokoma, who spoke to Nairametrics, lamented what he described as the Federal Government’s lack of respect for BASA arrangements.
What AFARN said
Mr. Nwokoma noted that despite the continued withholding of foreign airlines’ funds, Nigerian airlines operating regional and international routes have been consistent with the repatriation of their funds from foreign lands. He said:
- “The truth is that there is a BASA agreement. We are even lucky that foreign airlines still come to this country because if smaller countries can respect agreements, there is no reason we should not respect agreements. If Air Peace for instance goes to the United Arab Emirates (UAE), South Africa, air travellers procure its tickets, has Air Peace ever complained that it is not able to repatriate its funds? I have not heard that.
- “When Med-View was going to London and Dubai, people were buying its tickets and the airline did not for one day complained about its inability to repatriate its funds. The aircraft you see is a long-term payment. You are having a business with Boeing or Airbus, and the economics have been done that some money is being paid regularly by the operators. This money comes from air tickets.
- “If other climes are like Nigeria; that means operators will not be able to meet their agreements with these companies. It is unfortunate that things have degenerated to this level.”
Nwokoma emphasized that the federal government may have directed the Central Bank of Nigeria (CBN) to pay some parts of the debts to the foreign carriers, but said the debts have continued to climb as air tickets are being sold daily by the airlines.
He warned that with the continued withholding of foreign airlines’ ticket sales in the country, some of them may stop flying into the country.
He appealed to the government to ensure the full release of the airlines’ trapped funds in the country as a form of respect to BASA arrangements.
- “Everybody knows that everything in aviation is done in US dollars; maintenance, payment, and others. So, that is why the BASA agreement was reached.
- “This issue will continue until a solution is found by the government. The government should let us know the challenge they are facing and look for a way to address the situation,” he said.
Five airlines still unable to repatriate funds
Besides, two months after the federal government directed the CBN to release the part payment of $265 million, representing almost 50% of the total trapped funds, at least five of the carriers, majorly from Africa are yet to have access to their funds.
- A source close to one of the foreign airlines, but who declined to be named as details are still private, confided in our correspondent that some of the airlines were yet to get any amount of money from their trapped funds.
- The source regretted that the airlines were still facing the challenge despite the intervention of the International Air Transport Association (IATA) which has been in discussions with the CBN on the matter in the past four months.
- The source told our correspondent that his airline, one of the dominating carriers from West Africa was exempted from the funds by the CBN, while all efforts to correct the situation had failed.
According to the source, five of the continent’s airlines including AWA, Asky, Rwndair, and two others were yet to be credited by their banks from the approved funds by the federal government.
- The source said that the CBN had approved about $4 million for it as the first tranche of its $16 million total debts in the country in eight months, however, it said that IATA had intervened on the issue.
- However, it was also learned that in a bid to curb the losses, some of the foreign airlines have resorted to payment of the service providers in naira, rather than in dollars.
It is the DNA of FGN never to respect any agreement it signed. Our governments only understand strikes, suspensions etc before taking actions. A minister who has a smooth relationship with workers union or who abides with international agreements or settle commitments promptly is not seen to be working. Those regarded as working are those negotiating after
the country has been put into avoidable positions – strikes has commenced, holding discussions on removal of suspensions thereby running up and down on actions that could have been prevented. We have a different value system.
This is completely misleading. No fund is trapped. CBN did not trap their money and did not place a Post No Debit on their accounts. Their customers paid in full and their funds are with the banks still earning returns on such deposits. They never brought in forex so how on earth in the face of forex scarcity, do they expect CBN to get the forex.
They should be creative and find creative ways to invest the naira money here so that they can repatriate it through value addition to our economy.
They should not kill Naira the way their pro-foreign countries policies literally killed the Ghanaian cedi.
Comparing Nigeria to other small African countries is unfair. No small African country can cough out $600m for airline travel for foreign alines. If it is that easy, Ghana won’t run cap in hands to IMF for $1billion.
This blackmail of CBN to go find scarce USD for foreign airlines is not working and sustainable. There is no approx $1 billion forex for foreign airlines!
They should put their naira to work here and creatively repatriate it like some foreign companies are doing in agric, mining etc.