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By Chinelo Obogo
The International Air Transportation Association (IATA) has expressed disappointment at the Federal Government over the inability of foreign airlines to repatriate $464 million accumulated from sale of flight tickets, which has been trapped in Nigerian banks.
In a series of tweets, the global airline body said that the foreign airlines’ funds being blocked in Nigeria increased to $464million in July from $450 million in May, stating that the figure grew by $14 million.
“IATA is disappointed that the amount of airline money blocked from repatriation by the Nigerian government grew to $464 million in July. IATA’s many warnings that failure to restore timely repatriation will hurt Nigeria with reduced air connectivity are proving true with the withdrawal of Emirates from the market. Airlines can’t be expected to fly if they can’t realise revenue from ticket sales. Loss of connectivity harms the economy, hurts investor confidence, impacts jobs and people’s lives,” IATA said. Emirates Airlines had on Thursday, announced the suspension of its flight operations to Nigeria, starting from September 1, 2022 over its $85 million trapped in Nigerian banks.
Last month, the airline in a letter to Hadi Sirika, Nigeria’s Aviation Minister, requested support for the repatriation of its revenue, amounting to $85 million. The airline said the development had forced it to reduce its operations to the country from 11 flights weekly to seven. That was before Thursday’s total withdrawal.
Meanwhile, Aviation Round Table (ART) has said it s dismayed by the handling of the accumulated foreign airline funds trapped in local banks, due to the non-allocation of forex to these airlines.
The body said that in all Bilateral Air Services Agreement an Article in the agreement — transfer of earnings, clearly states that “each designated airline shall have the right to convert and remit to its country on demand, local revenues in excess of sums locally disbursed. Conversion and remittance shall be permitted without delay in accordance with the prevailing foreign exchange regulations”.
In a statement by its spokesperson, Olumide Ohunayo, the body said: “International trade is bound by agreements which are sacrosanct and respected. Nigeria cannot do otherwise if we crave the attention of investors in our industry. It’s important to state that foreign airlines sold these tickets at the official IATA rate and cannot be expected to go the parallel market to source, convert and remit as opined in some quarters, the central bank should do the needful as enshrined in the BASA agreements.
“These funds should have been remitted at the official rate on date of Sale immediately the Airlines get clearance after paying all the local obligations including taxes. The damage that our action has done to the Nigerian image as an investment friendly nation is far reaching, while the citizenry is faced with high fares, reduced capacity and limited travelling options, which will worsen if we continue on this trajectory. We found ourselves in this unenviable situation because we lack capacity to compete, which would have reduced the remittance volume.”
