Foreign airlines urge early release of $265m by CBN

By EDU ABADE, Business Editor

Association of Foreign Airlines and their representatives in Nigeria have urged the Central Bank of Nigeria (CBN) to promptly release the promised $265 million of its members’ trapped funds in the country.

President of the association, Kingsley Nwokeoma, who made the plea in an interview at the weekend, said it was commendable that the Federal Government promised to release part of the funds, but the money should be released without delay if the crisis in the aviation sector must be averted.

The Trumpet recalled that Emirates Airlines threatened to suspend flights to Nigeria from September 1, 2022 over its trapped $85 million, while some other foreign airlines gave the government till December 2022 coupled with fears that they might also suspend flights.

Also, British Airways on Friday, August 26, 2022, barred its travel agents in Nigeria from selling tickets amid the difficulty of foreign airlines in repatriating the $464 million proceeds of ticket sales to their home countries.

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Earlier, the International Air Transport Association (IATA) stated on August 18, 2022 that foreign airlines’ funds being withheld in Nigeria increased from $450 million in May to $464 million in July.

The trapped funds have made foreign carriers to increase air fares, reduce flights, while some suspended operations due to their inability to repatriate funds to their home countries.

To avert the impending crisis, the CBN announced the release of $265 million on Friday. A breakdown of the figure indicated that $230 million was released as a special foreign exchange intervention, while another $35 million was released through the Retail SMIS auction.

Director, Corporate Communications Department of CBN, Osita Nwanisobi, said in a statement that Governor of the apex bank, Godwin Emefiele, was not against any company repatriating funds from Nigeria, but that the bank favoured orderliness.

“With Friday’s release, it is expected that operators and travelers will have some relief, as some airlines had threatened to withdraw their services due to the unremitted funds for outstanding sale of tickets.

“The development is still unfolding and the airlines have not changed their stance until we see what the government plans to do in this regard. We need to be explicit on how much the CBN has released, how much will still be released, the time frame for the payments and repatriations to be made. We should have the exact figures and statistics because many airlines are involved.

“What is even more important is the meeting being convened by the House of Representatives. However, we don’t need to get to this point for the intervention to happen, because there is now panic. The airlines need the money, as some of them have long payment schemes with Boeing, Airbus and others,” the statement reads.

The operators further lamented that if other countries were like Nigeria, the airlines would not be able to service their debts and other obligations, adding that if they don’t service their debts or maintain their aircraft that will jeopardise safety in an industry in which safety remains crucial.

“Remember, Qatar has cut frequencies before Emirates gave the September 1, 2022 date, while the rest are asking the Federal Government to do something between now and December. That is why government is trying to look around to see what can be done. It doesn’t make business sense for the airlines if they can’t move their money to run their business,” he said.

Nwanisobi canvassed a holistic review of the situation so that Nigeria would not be seen in bad light, noting that the issue had been recurring for the funds to have risen to as much as $464 million.

“We know how much is being owed, so we need to know how much is being released to the different airlines. We need to have all the figures and timeline when the full funds will be released. It will be a continuous process and how we overcome the challenge that has been there over the years is important.

“These are the issues that should be considered to effectively resolve the issues. So, it is not only about releasing the money, but also about discussing critically and finding the best ways of going about it,” the statement added.

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