Nigeria: Aviation Professionals Ask Nigeria to Settle $464m Foreign Airlines’ Funds

More pressure has been mounted on the Federal Government over the $464m trapped funds belonging to foreign airlines flying Nigerian routes.

This comes on the heels of Emirates’ stoppage of flights on September 1 even as more airlines are said to be exploring all options to mitigate the effect of blocked funds.

A group of aviation professionals and stakeholders under the aegis of Aviation Roundtable (ART) expressed dismay “by the appalling handling of the accumulated foreign airline funds trapped in our banks, due to the non-allocation of forex to these airlines.”

The AON in a statement by its Assistant Secretary, Mr. Olumide Ohunayo, in a statement charged the Central Bank of Nigeria (CBN) to do the needful by allocating dollars to the airlines to repatriate money made from sale of tickets in line with the dictate of the bilateral air service agreement (BASAs).

It said, “In all Bilateral Air Services Agreement an Article in the agreement — transfer of earnings, clearly states that “each designated airline shall have the right to convert and remit to its country on demand, local revenues in excess of sums locally disbursed. Conversion and remittance shall be permitted without delay in accordance with the prevailing foreign exchange regulations”.

According to ART, international trade is bonded by agreements which are sacrosanct and respected. It said Nigeria cannot do otherwise if we crave the attention of investors in our industry.

The statement added, “It’s important to state that foreign airlines sold these tickets at the official IATA rate and cannot be expected to go the parallel market to source, convert and remit as opined in some quarters, the central bank should do the needful as enshrined in the BASA agreements.

“These funds should have been remitted at the official rate on date of Sale immediately the Airlines get clearance after paying all the local obligations including taxes.

“The damage that our action has done to the Nigerian image as an investment friendly nation is far reaching, while the citizenry is faced with high fares, reduced capacity and limited travelling options, which will worsen if we continue on this trajectory.

“We found ourselves in this unenviable situation because we lack capacity to compete, which would have reduced the remittance volume.

The unborn Air Nigeria cannot produce this capacity, irrespective of the funds allocated, but by an aggregated process of developing our industry to produce vibrant flag carriers that will be courted for commercial partnerships which is the purveyor for successful international flight operations.

“We are also of the opinion that to kick start this process, a functional and credible data gathering methodology for the industry is a necessity. We cannot continue to blow hot air without verifiable data.”

The International Air Transport Association (IATA), the clearing house for global airlines, had expressed disappointment with Nigeria.

IATA’s Regional Vice-President for Africa and the Middle East, Kamil Alawahdi in a statement on Thursday blasted the Nigerian government for allowing the money to hit $464 million as of July.

He said, “IATA is disappointed that the amount of airline money blocked from repatriation by the Nigerian government grew to $464 million in July.

“This is airline money and its repatriation is protected by international agreements in which Nigeria participates. IATA’s many warnings that failure to restore timely repatriation will hurt Nigeria with reduced air connectivity are proving true with the withdrawal of Emirates from the market.

“Airlines cannot be expected to fly if they cannot realize the revenue from ticket sales. Loss of air connectivity harms the local economy, hurts investor confidence, and impacts jobs and people’s livelihoods. It’s time for the Government of Nigeria to prioritize the release of airline funds before more damage is done.”

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