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Airlines’ funds trapped in Nigeria have continued to mount, a situation that has put the airlines in a tight corner.
As of December 2022, the trapped funds belonging to foreign airlines hit $550 million, despite the recent intervention of the Central Bank of Nigeria (CBN) to clear part of the funds.
Consequently, the International Air Transport Association, on Tuesday, disclosed that the trapped funds belonging to foreign airlines operating in Nigeria have reached $743,721,097 from $662m in January 2023.
IATA disclosed this in a letter addressed to the Minister of Aviation, Hadi Sirika, signed by the Area Manager West and Central Africa, Dr. Samson Fatokun, and obtained by our correspondent in Abuja.
According to the letter, IATA and the global airline community seek an invention from the minister for the resolution of airlines blocked funds issues in Nigeria.
“For over a year, Nigeria has been the country with the highest amount of airline-blocked funds in the world. Please find attached the comparative table of airlines’ blocked funds by country.
“Moreover, as of January 2023, airlines’ blocked funds in Nigeria have increased to $743.721.092 from $662m in January 2023 and $549m in December 2022.”
IATA had revealed last year, saying the fund is about half of the $1.1bn blocked funds in Africa and the Middle East.
IATA Regional Vice President for Africa and the Middle East, Mr. Kamil Ala Wadhi expressed disappointment with Nigeria over the issue when he paid a courtesy visit to the House of Representatives Committee Chairman on Aviation, Nnolim Nnaji.
Nnaji’ appealed to IATA to prevail on its member airlines to show understanding as the various organs of government were making efforts to ensure that their ticket proceeds were duly remitted.
The committee chairman reminded his guests that the prevailing situation was in consonance with the global economic meltdown assuring him that the federal government through the CBN had put in place a mechanism for the liquidation of the blocked funds.
The decision by Nigeria to inadvertently keep airlines’ funds has invariably led to high or ‘exploitative’ fares by the carriers.
IATA had warned of an impending hike in airfare in countries where airlines’ funds are trapped. IATA’s Vice-President for Africa and Middle-East, Kamil Al-Awadhi had at the IATA Annual General Meeting (AGM) held in Doha, Qatar July last year warned that carriers could be forced to remove lower fare inventories and replaced them with higher fares.
The government did not heed the warning as airlines’ funds piled up to the chagrin of many stakeholders. Nigerian air travelers are witnessing some of the worst fare disparity in the world and the citizens are bearing these huge costs. The least airfare on an economy class cabin to London from Lagos, for example, goes for N900,000.
The fares are outrageous, to say the least. The fares could even rise to N1.5 million ($3, 300) and N2 million ($4, 400) depending on the time of purchase. A return ticket on a trip to London to Lagos on Air France seen by Aviation Metric shows a ridiculous fair of $4, 221.40.
President of Aviation Safety Round Table (ASRT), Dr. Gabriel Olowo stated that what appears to be an exploitative airfare charged Nigerians by foreign airlines was a result of the chances and choices which the country refused to take which invariably led to the consequences of what many referred to as exploitative fares.
Olowo who was reacting to Aviation Metric’s story entitled, “Foreign airlines: Nigerians bear brunt of exploitative fares”, said Nigeria chose to limit payments of travel only to Naira, stressing that whereas fares globally are denominated in dollars.Google+