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Int’l airlines contemplating to leave Nigeria

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By Usman Oladimeji

A number of airlines might leave Nigeria due to blocked revenue.

International airlines operating in Nigeria have voiced their displeasure with the initial payment of $61 million made by the federal government to alleviate the $800 million Revenue of these airlines trapped in the county. They expressed disappointment, deeming the amount insignificant, and have even contemplated reconsidering their flight operations in Nigeria due to the government’s lack of priority regarding the release of these funds. Dr. Kingsley Nwokoma, the President of the Nigeria Association of Foreign Airlines and Representatives (AFARN), made this known during a press conference at Lagos’ Murtala Muhammed International Airport.

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The sum of $61 million, recently dispensed by the Central Bank of Nigeria (CBN), was criticized as insignificant by the association. They expressed frustration over the government’s lack of transparency regarding the potential offsetting of the blocked funds in accordance with a planned payment schedule. This schedule would ensure that the airlines are aware of when the entirety of the funds will be rightfully returned to them. Should the issue regarding the debt crisis remain unresolved, Nwokoma cautioned that a number of airlines might opt to withdraw their services from Nigeria, following in the footsteps of Etihad and Emirates Airlines.

High airfares out of Nigeria result in loss of potential travelers.

He expressed his disappointment towards the federal government’s infringement of the Bilateral Air Service Agreement (BASA) arrangements with the originating countries of the airlines. This act was detrimental to Nigeria’s reputation and image. He attributed the blocked funds to the high airfares out of Nigeria, mentioning that this was resulting in the loss of potential travelers who were opting for neighboring African countries with more affordable fares. Nwokoma bemoaned the ongoing circumstances, pointing out that the majority of international airlines operating in the nation were diverting funds from other parts of their operations to maintain their activities within the country.

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In urging the government to contribute financially, the association does not expect full payment but rather desires a comprehensive quarterly payment plan. He said recent discussion with Mr. Festus Keyamo, the Minister of Aviation and Aerospace Development, portrayed promising prospects. His commitment to the payment was evident, with a substantial sum of $61 million already disbursed. Nigeria truly basks in its peculiarity as a nation. According to him, in a scenario where all nations follow Nigeria’s example by defaulting, no airlines would want to operate the country.

FG urged to engage in discussions with the airlines.

Nwokoma argued that the government’s decision to release $61 million out of a total of $800 million had no meaningful effect on the foreign airlines’ operations. He strongly recommended that the federal government engage in discussions with the airlines to determine the payment arrangements for the remaining blocked funds. There is little reason to feel excessive enthusiasm about this matter. Only if we were currently in possession of approximately $300 million, or half of the outstanding debt owed to the airlines, could we begin to signal a glimmer of hope.

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AFARN president expressed the need for the government to engage in constructive discussions with foreign airlines, akin to the process of signing BASA agreements, in order to establish a mutually beneficial agreement for quarterly payment of funds. It is crucial that the government upholds this agreement to ensure significant advancements, only then can progress be made. As highlighted by Mrs. Hakama Sidi Ali, the Acting Director of Corporate Communications at CBN, in a statement released in Abuja, this disbursement demonstrates the bank’s determination to clear the backlog of pending matured foreign exchange.

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According to Sidi Ali, the CBN had implemented the initiative in order to diminish its remaining obligation towards the airlines. Foreign airlines are burdened by Nigeria’s indebtedness, as enormous sums are owed to several countries. The implications of this would be a decreased capacity of airlines in Nigeria, leading to diminished connectivity to the country, and further exacerbating unfavorable perceptions about the Nigerian business landscape. Additionally, it would contribute to escalated ticket costs for individuals intending to travel abroad.

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