Market News

By Joke Falaju, Abuja

Indications have emerged that foreign airlines have started dropping airfares following the release of about half of the trapped funds owed them by the Nigerian government. The President of the Association of Foreign Airlines and Representatives in Nigeria, (AFARN), Mr Kingsley Nwokeoma in a phone interview pointed out that foreign airlines stopped selling to Nigerians…

British Airways planes. President of National Association of Nigerian Travel Agencies (NANTA), Susan Akporiaye believes stuck fund crisis is rocking the air transport sector.

Indications have emerged that foreign airlines have started dropping airfares following the release of about half of the trapped funds owed them by the Nigerian government.

The President of the Association of Foreign Airlines and Representatives in Nigeria, (AFARN), Mr Kingsley Nwokeoma in a phone interview pointed out that foreign airlines stopped selling to Nigerians from the lower portal due to the trapped funds.

However, the fares have gone down after the government cleared about half of the funds being owed to them.

The Central Bank of Nigeria (CBN) said it has concluded payment of $136.73 million backlog owed to verified foreign airlines.

However, the International Air Transport Association (IATA) disputed the claim, insisting that $700million of their funds is still unpaid.

But Nwokeoma said airlines are dropping their airfares because of CBN’s new policy direction on the trapped funds and stable foreign exchange rates.

He also explained that increased competition on international route also forced foreign airlines to cut airfares.

“About half of the trapped funds has been paid, the good thing is that government is listening and doing what should be done, if they have been doing this like couples of years back, we won’t be where we are today,” Nwokeoma said.

He, however, debunked claims that Nigerians are not able to access the cheap flights portal saying, “you can verify from travel agents that such claims are not true.”

He expressed optimism that the airfares will further come down as the exchange rates gets better, saying “we all know that the aviation industry is dollar denominated.”

To curtail the issue of trapped funds, AFARN President urged government to always keep to agreement because it is based on the Bilateral Air Trade Agreement (BASA) which government is signatory to.

“It is important that the government stick to it and even if if there is a problem, communication is key,”Nwokeoma said.

“Even a payment plan can be designed such as developing a quarterly plan. We hope that the government will stick to what they are doing so that we can get this out of the way.”