…Say $61m Payment Is A Drop In The Ocean
There are fears that some of the foreign airlines operating into Nigeria may exit if the trapped fund crisis remains unresolved.
This is as the Association of Foreign Airlines and Representatives in Nigeria (AFARN) has described the $61 million recently released by the Central Bank of Nigeria (CBN) as part of the blocked funds as “a drop in the ocean,” saying the money was insignificant when compared to the about $800 million owed the foreign airlines in the country.
Dr. Kingsley Nwokoma, AFARN President, stated these on Thursday at the Murtala Muhammed Airport (MMA), Lagos, during an interaction with aviation journalists.
Nwokoma warned that if the crisis surrounding the debt was not resolved early, some of the airlines may follow Etihad and Emirates Airlines out of the country.
He regretted that the Federal Government violated the Bilateral Air Service Agreement (BASA) arrangements signed with the various countries these airlines emanated from, stressing that the action portended negativity on the image of Nigeria.
He attributed the blocked funds to one of the reasons airfares out of Nigeria were high, maintaining that the country was losing some of its potential travellers to neighbouring African countries.
Nwokoma lamented that with the current situation, most of the foreign airlines operating into the country are taking money from their operations elsewhere to sustain operations in the country.
He said: “We are not saying the government should pay all, but the government should have a plan to pay a chunk of the money every quarter. The fear is that if it continues like this, some of the airlines may go.
“The last conversation we had with Mr. Festus Keyamo, the Minister of Aviation and Aerospace Development, seemed good. He sounded serious about the payment and they have done $61 million thus far.
“Nigeria is just a very strange country. Some are still saying that the airlines should not be asking for any money from Nigeria. What is BASA? BASA is signed by countries and not airlines. We signed our commitment to the BASA and we are not doing anything about it.
“If all countries are defaulting like Nigeria, there will not be any airline that comes into the country again. The aviation industry is predicated on the U.S dollars. You pay your catering, handling, hotel and a lot of things in dollars and if you don’t pay, your crew would be sent out.”
Nwokoma insisted that the $61 million released by the government out of the $800 million was insignificant and without any impact on the operations of the foreign airlines.
“The foreign airlines are not talking about it because they felt it is a little drop. It is not something to be too excited about. If we have had about $300 million now or half of what the airlines are being owed, then, you can say there is hope.
Nwokoma lamented that with the current situation, most of the foreign airlines operating into the country are taking money from their operations elsewhere to sustain operations in the country.
He said: “We are not saying the government should pay all, but the government should have a plan to pay a chunk of the money every quarter. The fear is that if it continues like this, some of the airlines may go.
“The last conversation we had with Mr. Festus Keyamo, the Minister of Aviation and Aerospace Development, seemed good. He sounded serious about the payment and they have done $61 million thus far.
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“Nigeria is just a very strange country. Some are still saying that the airlines should not be asking for any money from Nigeria. What is BASA? BASA is signed by countries and not airlines. We signed our commitment to the BASA and we are not doing anything about it.
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“If all countries are defaulting like Nigeria, there will not be any airline that comes into the country again. The aviation industry is predicated on the U.S dollars. You pay your catering, handling, hotel and a lot of things in dollars and if you don’t pay, your crew would be sent out.”
Nwokoma insisted that the $61 million released by the government out of the $800 million was insignificant and without any impact on the operations of the foreign airlines.
He advised the Federal Government to discuss with the foreign airlines on the modes of payment for the blocked funds.
“The foreign airlines are not talking about it because they felt it is a little drop. It is not something to be too excited about. If we have had about $300 million now or half of what the airlines are being owed, then, you can say there is hope.
“The government should sit with the foreign airlines just like how you sign your BASA agreements and agree on quarterly payment of these funds. The government should please keep to that agreement. By then, we will be making progress,” he said.
The CBN had last week disbursed $61.64 million to foreign airlines through various deposit money banks (DMBs).
According to a statement issued by Mrs. Hakama Sidi-Ali, its Acting Director, Corporate Communications, in Abuja on Sunday, the disbursement was in fulfillment of CBN’s commitment to eliminate the backlog of pending matured foreign exchange in DMBs.
Sidi-Ali had said that the initiative was part of the CBN’s efforts to reduce its remaining liability to the airlines.
Kamil Alawadhi, the Regional Vice President, International Air Transport Association (IATA), had said at the 7th Aviation Summit held in Abuja, last year, that Nigeria owed the highest amount of airline trapped funds in the world.
The amount of money, which consists of the accumulated funds generated by the over 27 foreign carriers operating in Nigeria through the air transport services rendered to the Nigerian traveling public, but got trapped in the CBN due to forex scarcity, had continued to generate backlash both from within and outside Nigeria.
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