Release $265m in time, foreign airlines tell FG
The The Association of Foreign Airlines and Representatives in Nigeria has urged the Central Bank of Nigeria to waste no time in releasing the promised $265 million from its members’ trapped funds in the country.
The association’s president, Kingsley Nwokeoma, in a telephone interview with our correspondents on Saturday, said it was commendable that the government had promised to release some of the funds, but that there should be no delay if the brewing crisis in the sector had to be avoided.
Emirates Airlines had threatened to suspend flights to Nigeria from September 1 over its booby-trapped $85million, while other foreign airlines gave the government until December fearing they would also suspend their flights.
In addition, British Airways on Friday blocked travel agents in Nigeria from selling its tickets amid foreign airlines struggling to repatriate the $464 million in ticket sales revenue to their respective home countries. The International Air Transport Association said on August 18, 2022 that foreign airline funds withheld in Nigeria increased from $450 million in May to $464 million in July.
The $464 million booby-trapped has forced foreign carriers to raise airfares, cut flights and suspend operations due to their inability to repatriate funds to their home countries.
To avert the looming crisis, the CBN on Friday announced the release of $265 million. A breakdown of the figure indicated that $230 million was released as special FX intervention, while a further $35 million was released through the Retail SMIS auction.
The director of CBN’s corporate communications department, Mr. Osita Nwanisobi, said in a statement on Friday that the apex bank, headed by Mr. Godwin Emefiele, was not against the repatriation of funds from Nigeria by a company, but that the bank was synonymous with order.
“With Friday’s release, operators and travelers are also expected to breathe huge sighs of relief, as some airlines have threatened to withdraw their services in the face of unpaid funds for pending ticket sales. “, reads the press release.
Speaking on the apex bank’s decision, Nwokeoma said: “Development is still ongoing and the airlines have not changed their position until we see exactly what the government plans to do about this. regard. We need to be very explicit about how much CBN has released, how much would still be released, and the time frame for payments and repatriations to be made. We should have the figures and the statistics because there are several airlines involved here.
“Even more important is the meeting called by the House of Representatives. However, we don’t need to come to that for this intervention to happen, because now is the panic. The airlines need this money. These big airlines you see have a long payment system with Boeing, Airbus, etc.
“If every country is like Nigeria, the airlines will not be able to repay their debts and other obligations and you know that if you don’t repay your debt or don’t maintain your plane, it will jeopardize safety, and in this industry, safety is key. Hopefully by next week we will know exactly what those numbers are for all airlines.
“Remember Qatar cut frequencies before Emirates gave the September date, while others are asking the government to do something by December. That’s why the government is trying to look around to see what he can do. It makes no business sense for airlines if they can’t move their money around to run their business.
He called for a comprehensive review of the situation so that Nigeria is not in a bad light, noting that the problem was recurrent for the funds to have reached hundreds of millions of dollars.
He added: “We know how much this is owed, so we need to know how much is paid to the different airlines. We need all these figures and we also need a timetable indicating when the funds will be released; will this be an ongoing thing and how are we going to avoid this problem that has been there for years? These are the issues that should be considered in order to settle this issue. So it’s not just about releasing money, it’s about sitting down to critically examine this and find a way around it.
“It’s not just about releasing funds; it’s about everyone collectively sitting down to identify the root cause of the problem because it’s a shameful thing. For us, it is very important so that this situation does not happen again.
Asked about the breakdown of what was owed to each airline in the more than $600 million, Nwokeoma said there were more than 20 foreign airlines operating in Nigeria, including the “big 10” and that it would be difficult to estimate as tickets were still sold out and the fund would continue to grow.
He added: “The CBN needs to release the funds like yesterday as it would not have happened if the CBN had acted. The airlines wrote to the CBN several times and the airlines lobbied. Aviation is the most affected by Covid-19 and how many people actually fly.
“The war between Russia and Ukraine has affected the global 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 it doesn’t happen again, and we need to learn to respect the agreements.
Meanwhile, following reports that Emirates was canceling its plan to suspend flights from September 1, a senior airline official has asked one of our correspondents to speak with the public relations officer of the airline company. The official also provided the agent’s contact.
The airline’s public relations manager was contacted and asked if the international carrier would end its plan to suspend flights to Nigeria by September based on the latest developments from CBN and she replied: ” I don’t think so because I don’t have that information. ”
However, she promised to check with the carrier and come back. She had yet to do so at press time.