Stop Scandalising Nigeria, Local Airline Operators Warn Emirates, Turkish Airlines, Others
Airline Operators of Nigeria, have accused foreign airlines of exploiting their clients, as well as sabotaging government institutions by repricing tickets and threatening to exit the country over unrepatriated funds.
But consultants in the aviation industry have disagreed with the AON position on the matter.
Foreign airlines last week began to adjust their business model in Nigeria over $460m of unrepatriated foreign exchange revenue trapped with the Central Bank of Nigeria.
Emirates announced the suspension of its operations in Nigeria beginning September 1, 2022 over $85m trapped fund, while Turkish Airlines and British Airways began charging their fares in dollars.
Turkish Airways also announced that it would charge the highest fare for economy and business classes.
Nigerian legislators, the House of Reps members, have called for an emergency meeting with aviation stakeholders, including the International Air Transport Association over Emirates Airlines’ planned suspension of flight operations to Nigeria.
Also, IATA has reacted to the situation which it said would hurt the Nigerian economy. The body is insisting that the situation would cause more damage to the Nigerian economy
But Obiora Okonkwo, AON Spokesperson said during a panel session on Arise that foreign airlines are charging tickets at N820 per dollar which he described as exploitative, adding that the airlines have access to their funds.
Okonkwo said, “For me, using the big headline trapped looks kind of scandalous. Nobody’s money can be considered trapped when it is in the account and they can do what they want, except that they do not have the foreign exchange component to remit the money to their home country.
“If the airlines are selling their tickets and then converting the naira equivalent at the parallel market rate, then they should be able also to look for subsidies for remittance not only from the Central Bank of Nigeria, because there are other windows like the I&E Window, they are free to source into.
“So, I hope it is not a case of wanting to transmit from the CBN at the official rate when their rates are sold at the parallel rate. I think really the word trapped is too strong to be used for the situation which we are facing now.”
He added, “These tickets are being sold at the exchange rate of N820 (per dollar), so there is no justification to come back again and want to transmit money at N400 plus.
“We (local airlines) are also affected, but maybe we are more patriotic. Emirates and other airlines should try to show some love to Nigeria in this trying time. They never complained before now. CBN did not stop anybody from taking away their funds. They are saying use other alternatives sources.
“I mentioned the I & E Window, but the official exchange rate being given by CBN is not enough. Sometimes we don’t even get up to $50,000 to import basic spare parts or even pay for training overseas. We need love from them rather than scandalizing our institution.”
Reacting to Okonkwo’s claim, Sindy Foster, Principal Managing Partner of Aero Capital Solutions, a consulting firm for the aviation sector said it is unreasonable for investors in the aviation sector to have their funds trapped in the economy.
She said foreign airlines reviewed their tickets upwards because their funds have been trapped for over eight months.
Foster said, “It is completely unreasonable for an airline to invest in Nigeria and not be able to repatriate their funds for months. We should have dollars in the Bilateral Aviation Safety Agreement (BASA) fund. We should have money which could be used from within the aviation sector which can be converted to the purpose that Emirates have.
“If they were allowed to sell tickets in dollars in the first place, they would have had the ability to repatriate their funds. But because of the CBN regulations, they were forced to sell in naira.
“The international airlines sell tickets at a high price. They are selling it at a high price because they couldn’t get their money at the lower rate for how long? Eight and half months. They weren’t selling it at that rate eight months ago. So, for anybody to suggest that is what they are doing is misinforming the public. That is not the reality on ground.
“It is completely against the BASA that said you can convert and repatriate your funds on demand and then you don’t allow people to. Why will you be pushing people to a parallel market?
“There is no country in the world that you will go to where somebody is channeling you to what technically is an illegal route to obtain your legally earned funds. It doesn’t make sense. We shouldn’t be trying to push people in a direction which doesn’t serve Nigeria in the long run.”
Tayo Ojuro, Senior Partner, Aglow Aviation said Nigeria has reneged on the BASA agreement between Airlines and the country.
Ojuro said, “This is not good for business in Nigeria. It is not good for our roadmap of being a hub. In the future, it is going to affect jobs. What we are reneging at this point is the bilateral agreement which was signed. Overtime, it is not just Emirates, the funds have not been able to be transferred overtime.
“This is just a tip of the iceberg. This is just one sector; it is across Nigeria’s financial economic sector. This is going to actually affect foreign direct investments into Nigeria.”