Market News

By Lilian Ukagwu

Foreign airlines operating in Nigeria raked in around $1.1bn in 2022 despite foreign exchange challenges, The PUNCH reports.

In a conversation with our correspondent on Monday, the Chairman of the Airlines and Passengers Joint Committee of the International Air Transport Association, Bankole Bernard, quoting a report, he stated that the $1.1bn revenue generated from travel in Nigeria is expected to continue thriving due to the high demand for travelling within the country. He expressed confidence that the figures will remain steady in the near future.

The PUNCH had reported that the Senate passed a resolution calling on the Central Bank of Nigeria to release $717,478,606 of airline funds that were trapped in the country.

The upper chamber also urged the CBN to allocate $25m to airlines operating in Nigeria at its fortnightly dollar auction.

Responding, Bernard stated that the Senate may not intervene, adding that the CBN had already shown disregard for the law by only complying with a court order to release the old notes.

“The CBN is not going to do anything. We find ourselves in any environment that is full of anarchy. Anarchy is a state of confusion where there is a total disregard for the law. It took the court to summon CBN to comply with even releasing the old notes, and you now think the Senate will talk to them and they will listen. Let’s be sincere with ourselves and stop fooling around,” he argued.

When asked if some of the affected airlines might withdraw their services as a result of the trapped funds, he said, “They cannot withdraw their service, unfortunately. They did not buy the aircraft for them to park. If they have somewhere more lucrative to take the aircraft to they will take it there. So, do not be deceived, it is because they still find our market viable irrespective of these challenges and that is the sincerity we must all face. Our market is viable that is why they are still coming. However, it does not mean that they do not have challenges.”

Bernard, who is also the Managing Director /CEO of Finchglow Holdings, disclosed that some of the airlines had started selling tickets in dollars, adding that the exchange rate for the conversion had gone up significantly.

“They have started selling in dollars. Not only are they selling in dollars, the exchange rate for the conversion has gone really high. It is 640/$, which is closer to the black market rate,” he said.

Also reacting, the spokesperson for foreign airlines in Nigeria, Kingsley Nwokoma, stated that unless the Nigerian government takes immediate action to repatriate the funds, airlines might be forced to leave the country.

Nwokoma emphasised that the demand for the repatriation of funds had been a long-standing issue among foreign airlines in Nigeria and the inability to access those funds had led to a significant impact on the airlines’ operations, profitability, and ultimately their willingness to continue operating in the country.

According to him, many airlines have currently either ceased operations due to the inability to repatriate their funds or cut down on the frequency of flights.

Nwokoma claimed that if the government does not immediately begin the process of repatriating the trapped funds, more airlines would leave the country.

Speaking on the possibility of the CBN to begin disbursement of the funds following Senate’s order, he said, “You will not see that happen with the limited days of this tenure because it has been a while the airlines have been clamouring for these funds and we have seen the consequence, airlines are leaving. More airlines are planning to leave if these funds are not repatriated.

“Before we start to talk about whether it will be in tranches or whatever mode, there has to be that willingness from the government to the airline. It has to say it has this amount of money, and it wants to make sure that everyone gets the money according to the BASA regulation. If any of the airlines have been called or there had been any mechanism to begin any disbursement, the airline would have made a statement.”