How they beat the law revealed; ACF backs sanctions
Airlines yet to receive full payment of dollars approved by CBN
By Prince Okafor
Fresh indications have emerged that the Federal Government is yet to release over 50 per cent or $265 million foreign exchange for foreign airlines operating in the country to repatriate to their countries.
The foreign airlines collect Naira for their tickets to customers and exchange same for foreign currencies for their operations. But recently they said they have been unable to do so through the official foreign exchange market due to scarcity of foreign exchange in Nigeria.
Following the development, the Federal Government promised to release about $265 million of the over $456 million trapped funds to the airlines penultimate week. The move was acknowledged by the IATA, hailing the country for taking strategic measures to end the problem.
However, findings by Saturday Vanguard showed that the airlines have only received 25 percent ($133 million) of the amount promised.
Further findings showed that the 25 percent was released to few of the airlines, while some others were yet to receive any fund.
The development has forced most airlines operating in the country to stop receiving payment for air tickets in naira, which contravenes the Nigerian Civil Aviation Authority, NCAA, directives.
To beat the law, the airlines simply direct passengers, travel agents to their portal where payments are done in dollars or pounds. They don’t openly reject Naira but make it impossible for people to buy tickets with Naira.
However, the foreign airlines have noted that their inability to source foreign exchange to repatriate their money has made them to lose confidence in operating in the country although Nigeria remains most lucrative route for many of them.
It would be recalled that the Federal Government, through the Central Bank of Nigeria, released about 265 million dollars to service these trapped funds. The move was acknowledged by the International Air Transport Association, IATA hailing the country for taking strategic measures to end the problem.
Sadly, that gesture has not brought a breather to the industry. Ticket fares are so high that economy tickets to USA range between N1. 5m to N2m or above. The exploitative tendencies of the foreign airlines have had a toll on passengers. Qatar Airways and their Moroccan counterparts are among the few still accepting Naira.
NCAA to deal with airlines breaching laws
The Minister for Aviation, Hadi Sirika has said that the NCAA, had been directed to deal with any airlines willfully breaching the country’s laws in order to protect the interest of Nigerians against reported airlines’ operational malpractices, warning that no violator, no matter how highly placed, would be spared if caught.
He said: “I want to use this opportunity to say that reports are reaching us that some of the airlines are refusing to sell tickets in naira. That is a violation of our local laws, they will not be allowed. The high and the mighty among them will be sanctioned, if they’re caught doing that.
“NCAA had been directed to swing into action and once we find any airline violating this, we will definitely deal with them. Also, they blocked the travel agents from access. They also made only the expensive tickets available and so on so forth.
“Our regulators are not sleeping; we have a very vibrant Nigerian Civil Aviation Authority. Once they find any airline guilty, that airline will be dealt with because we need to protect our people. It is according to our agreements, to what we have signed and this is according to international convention.”
FG should open further windows of engagement —NANTA.
In a swift reaction to the development, the National Association of Nigeria Travel Agencies, NANTA, through Mrs. Susan Akporiaye stated that, “Indeed, the delay in the repatriation of funds of foreign Airlines in the country, assumed an embarrassing scenario when IATA bared its fangs and labeled our country a debt bearing nation, which brought us knocks to no end.
“As you are aware, NANTA embarked on empathy visits to all the foreign Airlines to share in their pains and rob minds on engaging Government through the Ministry of Aviation and the Central Bank of Nigeria, to readily find solutions.
“Indeed, most of you in the media engaged me weekly, on how to solve this problem of forex. We are grateful for your dedication and reportage on the efforts we made, even in face of threats by some of the foreign Airlines to cease and wind up operations in Nigeria.
In between these strangulating circumstances, the airlines withdrew lower inventories across board, selling at the highest possible openings as a way to cushion their funds being trapped.
“As usual with them, their response which we could describe as ‘High Fare Pandemic’, is solely targeted at Nigeria and Nigerians.
“It is sad that Nigerians have to buy tickets to the tune of three to four million naira and be charged as high as one million naira to change travel dates even on tickets bought before these issues began.
“This is unacceptable, exploitative, and hostile to the survival of Nigerian aviation downstream sector and to which we call for sanity and return to the best inventory practices and deployment.
“And to our Government, we appreciate the response to the release of some funds, but we urge Government, as a matter of urgency to open further windows of engagement by calling for a meeting with all parties involved; to include CBN, Minister of Aviation, Minister of Finance, Foreign Airlines, NCAA, IATA and NANTA.
“No doubt, our clients, Nigerians, are badly hit by this obnoxious response by the foreign Airlines, we wish to submit that despite the issues at stake, Nigeria remains a high net worth destination for the Airlines to do business.”