The repatriation faceoff between the Nigerian government and the International Air Transport Association (IATA) is escalating and may stifle the flow of international airlines into the country.
The President, Association of Foreign Airlines and Representatives in Nigeria, Kingsley Nwokeoma, said if the situation is not swiftly addressed, more international carriers would join Emirates Airlines, which earlier this week announced that it’s suspending flights to Nigeria effective September 1.
Nwokeoma made the postulation following the announcement by the British Airways on Thursday that it is going to hike the cost of its flight tickets.
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“Good afternoon. Please be informed that information reaching us from BA indicates that the airline is changing to full fares F, J, W and Y any moment from now. Kindly let (us) issue any pending tickets to avoid fare increase,” a notice from the British Airways said.
IATA had decried the Nigerian government’s unwillingness to release now over $450 million earned revenue of foreign airlines. The aviation body said the situation will hurt the country.
“Airlines can’t be expected to fly if they can’t realize revenue from ticket sales. Loss of connectivity harms the economy, hurts investor confidence, impacts jobs and people’s lives. The Government of Nigeria needs to prioritize the release funds before more damage is done,” IATA said.
IATA is disappointed that the amount of airline money blocked from repatriation by the #Nigerian government grew to $464 million in July. #blockedfunds
— IATA (@IATA) August 18, 2022
Punch quoted Nwokeoma as saying that if other countries behave like Nigeria, there will be no aviation industry. He added that the way it is going, Nigerians may end up depending on neighboring countries for international flight services.
“This is just the beginning. It is over $1 billion dollars that is being held and they (foreign airlines) cannot repatriate it. If other countries are like Nigeria, there will not be any industry because this money is used for maintenance. Even the money used to pay their staff in Nigeria is coming from other climes.
“Aviation industry is all about 100 per cent safety. If there is no money, safety will not be 100 per cent guaranteed. So, it is going to continue. Emirates has kick-started it and I’m sure that you are aware that British Airways has cut flights into Nigeria and that is how it is going to start.
“Just like Emirates did, they will first of all cut their flight into Nigeria and they will look at it holistically again and if it is not working out, then it’s not working out. This did not start today. It started over the years and the government is not doing anything.
“Look at it this way, when things were not this bad, what commitment did the government make? Is it now that things are gloomy? So, we hope that we don’t have to go to Benin Republic, Togo or Ghana before we can fly out or do our international travels,” he said.
Lamenting further, Nwokeoma said airline companies need the fund to stay in business.
“I keep asking this question that if other climes are behaving like Nigeria, will there be an aviation sector? The airplanes that come in are not our freight. They have to pay Boeing, they pay AirBus, they pay all these people, they have a payment scheme and where is the money coming from? So, it is an issue,” he said.
Emirates Airlines was the first among many that are involved in the $450 (now $464) million trapped fund to pull out of Nigeria. The United Arab Emirates (UAE)-based company’s share of the fund, which has been increasing by $10 million monthly, was originally $85 million.
While other airlines are yet to take similar steps, there is concern that Emirates’ decision will eventually get contagious and its impact will cripple Nigeria’s aviation industry that has been on life support for months now.
Nigeria’s inability to repatriate the trapped funds is as a result of its forex crisis. Dollar shortage has forced the Central Bank of Nigeria (CBN) to tighten its forex policies, limiting the outflow of foreign currencies to the barest minimum.
Nwokeoma said British Airways’ move to increase fares is to make up for dollars loss and it will result in expensive air tickets.
“It is basically to cover for the dollar loss, but some airlines are doing it already. So, that means air tickets will be more expensive.
“It will be more expensive because it will now be in relationship with the black market rate. So, the F, J, W, Y middle seats will be more expensive,” he said.
Nigeria’s Aviation Minister Hadi Sirika said it is not the first time Nigeria was withholding funds belonging to foreign airlines but there are efforts to see that the funds are released. However, the revolting steps being taken by foreign airlines shows that whatever the Nigerian government is doing to address the challenge is not working.