Delayed payment to foreign airlines contravenes BASA provisions — Stakeholders

For the first time in the Nigerian aviation industry’s history, some foreign airlines had to shut down operations in the country while others were warming up to do the same before the Central Bank of Nigeria (CBN) intervened, releasing about $265 million.

If the apex bank had not intervened, the industry would not have been saved from the national embarrassment and several Nigerians, especially students would have spent fortunes on flight tickets.

Despite the CBN’s intervention, several aviation stakeholders and experts have said they expect more from President Muhammadu Buhari. The experts, who spoke in separate interviews, expect the government to adopt better communication strategies in dealing with both foreign and local airlines, make forex available to domestic airlines and win back its credibility as a credit-worthy nation.

International airlines have as much as $464 million trapped in Nigeria. 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.

This development caused Emirates Airlines to announce the suspension of flights to Nigeria from September 1, with several others including British Airways reported to be warming up for the same action.

The CBN had released the sum of $265 million with a portion of it going to settle trapped funds belonging to foreign airlines.

Out of the fund, $230 million of the intervention fund, according to reports, was to tackle FX intervention while another sum of $35 million was released through the Retail SMIS auction to clear outstanding ticket sales.

The CBN Governor, Godwin Emefiele and his team are said to be concerned about the trapped funds and the implications for the industry and the economy at large.

Meanwhile the managing partner, TSD Travels, Mr Akin Esho speaking with journalists, described the situation as a national embarrassment, which is capable of tarnishing the image of the industry and the nation as a whole.

According to him, the government needs to re-strategise the approaches to take in dealing with foreign airlines if it is ready to do business. Without mincing words, he argued that the government was negligent in performing its responsibilities, especially in the area of providing adequate information to foreign airlines on what it is doing to release the said ‘trapped funds.’

He said, “The federal government should have opened a discussion earlier with the airlines to give them assurances on the payment. If the government had interfaced with the airlines, they would not have reduced their flights to Nigeria or sold their tickets at exorbitant rates to Nigerian travellers.

“What CBN has done is a welcome development because in everything we look at things from the positive development. But they should have saved the country the embarrassment and high cost of flight tickets levelled on Nigerians, especially those students who were travelling back to school overseas. I hope we have learnt our lessons from the unfortunate incidents.”