The Association of Foreign Airlines and Representatives in Nigeria has asked the Central Bank of Nigeria not to waste time in releasing the promised $265m out of its members’ trapped funds in the country.
The president of the association, Kingsley Nwokeoma, in a telephone interview with our correspondents on Saturday said it was commendable that the government promised to release part of the funds, but that there should be no delay if the brewing crisis in the sector were to be averted.
Emirates Airlines had threatened to suspend flights to Nigeria from September 1 over its trapped $85m, while some other foreign airlines gave the government till December, coupled with fears that they may also suspend flights.
Also, British Airways on Friday stopped travel agents in Nigeria from selling its tickets amid the difficulty of foreign airlines to repatriate the $464m ticket sales proceeds to their respective home countries. The International Air Transport Association stated on August 18, 2022 that foreign airlines’ funds being withheld in Nigeria increased from $450m in May to $464m in July.
The trapped $464m has made foreign carriers to increase airfares, reduce flights and suspend operations due to their inability to repatriate funds to their home countries.
To avert the impending crisis, the CBN on Friday announced the release of $265m. A breakdown of the figure indicated that $230m was released as a special FX intervention while another $35m was released through the Retail SMIS auction.
The Director, Corporate Communications Department, CBN, Mr Osita Nwanisobi, said in a statement on Friday that the apex bank, headed by Mr Godwin Emefiele, was not against any company repatriating its funds from Nigeria, but that the bank stood for orderliness.
“With Friday’s release, it is expected that operators and travelers as well will heave huge sighs of relief, as some airlines had threatened to withdraw their services in the face of unremitted funds for outstanding sale of tickets,” the statement said.
Speaking to the move by the apex bank, Nwokeoma said, “The development is still unfolding and the airlines have not changed their stance until we see exactly what the government plans to do in this regard. We need to be very explicit on how much the CBN has released, how much would still be released and the time frame for the payments and repatriations to be made. We should have the figures and statistics because a number of airlines are involved here.
“What is even more important is the meeting that is being called by the House of Representatives. However, we don’t need to get to this point for this intervention to happen, because there is now panic. The airlines need this money. Those big airlines you see have a long payment scheme with Boeing, Airbus as so on.
“If every country is like Nigeria, the airlines won’t be able to service their debts and other obligations and you know if you don’t service your debt or maintain your aircraft, that will jeopardise safety, and in this industry, safety is key. We are hoping that by this coming week we will know exactly what those figures are for all the airlines.
“Remember, Qatar has cut frequencies before Emirates gave September date, while the rest are asking the government to do something between now and December. That is why the government is trying to look around to see what it can do. It doesn’t make business sense for the airlines if they can’t move their money to run their business.”
He called for a holistic review of the situation so Nigeria would not be in a bad light, noting that the issue had been recurring for the funds to have risen to hundreds of millions of dollars.
He added, “We know how much that is being owed, so we need to know how much is being released to the different airlines. We need to have all those figures and we also need to have a timeline on when the funds will be released; will it be a continuous thing and how are we going to avert this problem that has been there over the years? These are the issues that should be considered in order to get this matter sorted. So it is not just about releasing money, it is about sitting down to look at this critically and find a way around it.”
“It’s not just about releasing some funds; it’s about everybody sitting down collectively to identify the root cause of the problem because it’s a shameful thing. For us, that is very important so this situation doesn’t repeat itself.”
Asked about the breakdown of what was due to each airline in the over $600m, Nwokeoma said there were over 20 foreign airlines operating in Nigeria, including the “big 10” and that it would be difficult to estimate because tickets were still being sold and the fund would still be increasing.
He added, “The CBN needs to release the funds like yesterday because it would not have been the case if the CBN had acted. The airlines have written to the CBN a couple of times and the airlines have been putting pressure. Aviation is the worst hit by Covid-19 and how many people are really flying.
“The war between Russia and Ukraine has affected the world oil sector and you can even see that our local carriers are also affected. We really need to look at the real cause of this and make sure that these do not happen again, and we should learn to keep to agreements.”
Meanwhile, on reports that Emirates was cancelling its plan to suspend flights from September 1, a senior official of the airline asked one of our correspondents to speak with the airline’s public relations agent. The official also provided the contact of the agent.
The airline’s PR official was contacted and asked if the international carrier would halt its plan to suspend flights to Nigeria by September going by the latest development from CBN and she replied, “I don’t think so because I don’t have that information.”
She, however, promised to make enquiries from the carrier and revert. She had yet to do so as of press time.