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The National Association of Nigeria Travel Agencies (NANTA) has expressed a deep concern over the decision by the Nigerian government to withhold foreign airlines’ $450 million funds, saying the situation poses a serious threat to the entire aviation industry.
President of NANTA, Mrs. Susan Akporiaye in a statement said the carriers could resort to taking out lower inventory in the system resulting in a high cost of tickets from the Nigerian market
She equally stated that a carrier’s six-hour trip to London for example may attract a fare rate of about $2000 or more and also encourage tickets sold outside the country to flood Nigeria, thus affecting the survival of Nigerian travel agents and consequent loss of taxes and levies from such transactions.
Her words, “As Nigerians, we are patriotic and have presented our country well in the global travel industry and rightly felt disturbed that Nigeria is on the brink of a wrong narrative at the just concluded International Air Transport Association (IATA) 78th Annual General Meeting (AGM) held in Doha, Qatar on the account of airlines trapped funds to which Nigeria is Africa’s leading boggy boy”.
“NANTA as a strategic concerned partner in the downstream aviation sector has over the years appealed to the government through the Central Bank of Nigeria and also through the ministry of Aviation to see to the possibility of reducing the humongous trapped funds which at the month of May 2022, is estimated at well over $450 million”.
“The current situation presents a real threat to the industry and the continuity of our business as travel professionals, bearing in mind the potential jobs losses and the attendant national economic losses as we are just gradually coming out of the pandemic era”, she added.
She appealed to the Central Bank of Nigeria (CBN), the Ministry of Aviation, and the office of the Vice President to speedily intervene to bring down the amount of trapped funds to help resolve the operations of these airlines.
NANTA frowned at the difficulty faced by the carriers to repatriate their funds, hinting that the situation would not encourage best practices from the airlines that going through excruciating pains to get their money.
Akporiaye lamented that a bleak future more than the effects of the COVID-19 pandemic awaits Nigerian travel trade operators if nothing concrete is urgently done to address the disturbing situation, by the CBN.
IATA had last week at its just stunned international audience in far-away Doha, Qatar disclosed that airlines’ unremitted revenues from Nigeria (known as blocked funds) have risen to $450 million, representing 25 percent of the total amount of international carriers’ funds held back by central banks of many countries put at $1.6 billion by end of April 2022.
IATA Regional Vice-President, Africa, and the Middle East, Kamil Al-Awadhi said airfares charged by international carriers are three times higher than what obtained in other countries that do not retain airlines’ revenues and expressed fear that the fares might continue to rise until Nigerians would not be able to afford international travel and that would eventually weaken the nation’s economy.
Other countries in Africa that hold on to the huge amounts of airlines’ revenues include Zimbabwe – $100 million; Algeria – $96 million; Eritrea – $79 million and Ethiopia, $75 million. Alawadhi explained that airlines were charging higher fares to Nigeria so that they could make a profit from one leg of the trip, as most trips are charged on return tickets.
For example, if a passenger buys Emirates ticket in Dubai to travel to Nigeria, the payment is fully received by the airline, but if a passenger buys a similar ticket from Lagos to Dubai, the money is allegedly held down by the Central Bank of Nigeria, so the airline would charge a higher fare in order to make profit from tickets bought outside Nigeria.
Al-Awadhi said that although Nigeria was the biggest economy in Africa and also a major oil producer, it was bogged down economically by its depreciating currency, hence the inability of the West African nation to remit airline earnings.
The Director-General of IATA, Willie Walsh while fielding questions from Aviation Metric on the issue said they were looking at ways to get these funds out, lamenting that the situation was really having an impact on the airlines and the recovery of the market as well because airlines will be reluctant to bring capacity into markets where they can’t repatriate their money.
According to Walsh, “It affects national growth and additional capacity. If you can’t get your money out, I am sorry, it is a simple business decision, you are not going to get additional capacity. Airlines are looking to recover their money and they are not going to put their funds into markets that which they have no confidence in.
“ I think this is a significant factor against recovery in the continent. It is unfortunate because it would affect the consumers they are not going to get the choice, they are not going to get the competition and they would not be able to get the choice that they have been getting if the funds were not blocked. They are big issues, really big issues”.Google+