The International Air Transport Association (IATA) has described as unacceptable the withholding of international airlines’ funds to $450 million. The amount is more than four other African nations put together.
Other nations keeping airlines’ funds are Zimbabwe ($100 million); Algeria ($96 million); Ethiopia ($75 million).
The funds are proceeds from sales of foreign airlines’ tickets, among others that are trapped in Nigeria.
As of March this year, the trapped was $$283 million ((N158.48billion). According to IATA, the trapped fund has hit $450 million.
The accumulated funds are seriously eroding the image of the country as the clearing house for over 200 global airlines said the attitude of the Nigerian government towards the trapped fund is “unacceptable” and one that has seriously put foreign airlines in dire strait.
IATA’S Regional Vice President Africa & Middle East, Kamil Al-Awadhi who addressed African and Middle East journalists at the IATA 78th Annual General Meeting (AGM) taking place in Doha, Qatar said the Nigerian Central Bank of Nigeria (CBN) was not forthcoming in helping the carriers to repatriate their humongous funds.
Al-Awadhi disclosed that he had made several trips to Nigeria to meet with Nigeria’s Vice-President, Prof. Yemi Osinbajo for the release of the funds and the huge implications it has on the airlines and the aviation industry in the country had not yielded any fruit.
He promised to head back to the country to find a way of resolving the logjam, lamenting that it is sad that Nigeria owes the largest bulk of blocked funds in the continent of Africa.
His words, “Nigeria needs to start reducing the backlog. The Central Bank of Nigeria was not forthcoming on the blocked funds. It is sad that Nigeria owes the bulk of the entire blocked funds. This is very unacceptable”.
“We heard that there is shortage of dollars. It has been a hectic ride. We met with the Vice-President. We will keep checking. This is going to damage the image of the country. We are hoping that it will go down well. The figure is huge”.
He lamented that the situation is seriously telling on the operations of the airlines as the carriers have dipped into their reserves to continue to finance many of the flights they operate to Nigeria and some other African countries that have kept airlines’ funds.
He noted that this is coming at a time the carriers are coming out of the devastating COVID-19 pandemic that took the worst hit ever on the global aviation industry, stressing that many carriers were yet to fully recover from it.
According to him, “Some airlines are going out of business and some are getting different types of funding of their operations. The little cash airlines have, have been depleted, as this eats deep into their reserve”.
He disclosed that many carriers are scrambling to operate in Nigeria because of the great yield the route provides including the fact that many of the carriers have doubled their fares because of the difficulty in sourcing funds to operate flights to Nigeria.
He stated that travelers to and from Nigeria would have to bear the brunt of the rise in international airfares as a result of the trapped funds.
According to him, “Airlines are scrambling to get more flights to Nigeria. Nigerian travelers are willing to pay for it. It is not helping other Nigerians to travel. It is not helping other Nigerians to travel. The prices are ridiculously expensive more than twice the price. We urgently need the funds for more work”.
Early this year, Aviation Minister, Hadi Sirika during the commissioning of the new international terminal of the Murtala Muhammed Airport, Lagos appealed to the CBN to look at ways it could help the carriers to repatriate their funds which stood at $283 million then.
According to the Minister, the sector needs the support of the Central Bank of Nigeria (CBN) through the directives of President Muhammadu Buhari to aid access of both local and foreign airlines to foreign exchange.
He said: “Aviation business suffers from issues of foreign exchange by local and foreign airlines and their inability to repatriate blocked funds.
“Nigeria currently holds $ 283million worth of foreign airlines fund in the country. I humbly ask for the support of the Central Bank of Nigeria (CBN) through the directives of President Muhammadu Buhari, to aid access of both local and foreign airlines to foreign exchange.