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Trapped Funds: Reprieve for Foreign Airlines, as CBN Releases $265M Intervention

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Foreign airlines operating in the country and their passengers can now heave a sigh of relief as the Central Bank of Nigeria has released $265million to airlines operating in the country to settle outstanding ticket sales to check a brewing crisis in the country’s aviation sector.

Disclosing this in a statement, on Friday, the Director, Corporate Communications Department, CBN, Mr Osita Nwanisobi, said the Nigerian government was concerned about the development and what it portended for the sector and travellers as well as the country in the comity of nations.

A breakdown of the figure indicated that $230million was released as special foreign exchange intervention while another $35million was released through Retail SMIS auction.

Nwanisobi retiterated that the bank was not against any company repatriating its funds from the country, adding that what the bank stood for was an orderly exit for those that might be interested in doing so.

“With Friday’s release, it is expected that operators and travelers as well will heave huge sighs of relief, as some airlines had threatened to withdraw their services in the face of unremitted funds for outstanding sale of tickets,” CBN said.

There has been serious concerns and reactions over hundreds of millions of dollars earned by foreign airlines operating in the country which they could not repatriate due to foreign exchange scarcity problems.

SaharaReporters had during the week reported that some international airlines whose $600million got stuck in Nigeria’s Central Bank were not happy with the carefree attitude shown by the Nigerian administration.

Some of the foreign nations had said they gave between now and December — the deadline when the Nigerian government should pay the accrued debt or risk having them leave the nation.

Sunrise Nigeria earlier reported that Emirates Airlines had announced that it would suspend its flights to Nigeria from September 1 this year.

The proposed suspension of flights to Nigeria is connected to its failure to repatriate its trapped ticket sales fund in the West African country back to its home country in the United Arab Emirates (UAE).

Meanwhile, the foreign nations’ ultimate intervention has been linked to the CBN’s failure to release the trapped monies for the airlines to return to their home countries in violation of the deal they signed with Nigeria as outlined in the current Bilateral Air Service Agreements (BASAs).

This is just as the seeming silence of the various local bankers of the foreign airlines in Nigeria has been attributed to the fact that it is only the CBN that is empowered to do this.

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National Carrier to be Launched Before Buhari’s Exit, says Aviation Minister

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By Elizabeth Okwe

The Federal Government has given the assurance that all impediments against the establishment of the National Carrier, Nigeria Air, will be removed to enable it take to the skies before May 29, 2023.

Minister of Aviation, Sen. Hadi Sirika, who gave the assurance at the National Aviation Stakeholders Forum 2023, on Thursday in Abuja, said the Federal Government is taking necessary measures to overcome the hurdles introduced by the indigenous airlines that went to court to stop the process.

He described as unfair the action of the local airline operators, saying that the Buhari government had supported local airlines to stabilise and grow more than all previous governments.

Sirika described their action as constituting a stumbling block to the realisation of the national carrier project which will impact positively on job creation and better opportunities in the industry.

According to the Minister, the Nigerian Aviation industry is the only one in the world where qualified pilots are without jobs while in other climes there’s shortage of pilots.

“About 50 pilots had come to me at a time complaining about their unemployment status, and I believe that the national carrier should be able to employ more pilots and create other job opportunities” he said.

The reason for this, he said, was because of domestic airlines preference for foreign pilots and other operational staff and advised them to begin to put the nation first in their recruitments.

He described Ethiopian Airlines, the preferred bidder for the national carrier as amongst the very best that the industry has, with over 200 aircraft, highly profitability, one of the best training institutions and a Maintenance, Repair and Overhaul (MRO) facility.

The Minister further reiterated that with the population of Nigeria and Ethiopia, the two largest in Africa, and Nigeria’s location at the center of the continent, Nigeria Air will be able to play a major role in the Single African Air Transport Market (SAATM).

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Aviation Minister to Host Stakeholders on Developments in the Sector

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(File photo)

In continuation of the established tradition of regular interactions with major players in the aviation industry in Nigeria since the inception of the Buhari administration, the Minister of Aviation, Senator Hadi Sirika will host aviation stakeholders on Thursday 23rd March, 2023 in Abuja.

A statement by the Special Assistant to the Minister on Public Affairs, Dr James Odaudu said the idea of the regular meetings has been to ensure that all industry Stakeholders are carried along, and make inputs in the development and implementation of programmes and policies for the success of the industry.

The statement also explained that the Stakeholders’ Forum, the 10th of the kind, is to bring together all relevant Industry Players to brainstorm on the Policies and Programmes that have, and will continue to move the nation’s aviation industry forward and set it as one of the best in the global aviation community.

“The Forum will assist the Federal Ministry of Aviation and all its Agencies to have direct contact with the very important Stakeholders in and outside the industry, articulate ideas on the way forward and brainstorm on the developments within the sector as a whole.

“The Forum is also expected to afford the Stakeholders another opportunity to ventilate their opinions on the journey so far, and ensure that policies and programmes implemented in the aviation industry mirror the expectations of Nigerians, and truly lead to the socioeconomic and national development of the nation”.

It quotes the Minister as saying that the Forum will also seek to provide answers to pertinent questions, provide sensitisation and clarifications on policies and programmes, provide awareness on activities of government and non-governmental organisations in the industry.

The Forum which is expected to be declared open by the Vice President, Professor Yemi Osinbajo will bring together all relevant industry players within and outside the industry namely; The Ministers of Finance, Budget and National Planning, Labour and Employment, Health, Agriculture, Transportation and Environment.

Also expected at the Forum, aside the regular aviation sector players, are the Secretary to the Government of the Federation, the Head of Civil Service of the Federation, Accountant General of the Federation, Chairman, National Salaries, Income and Wages Commission, Director-General, Budget Office, Presidential Committee on Salaries, and CEOs of Media establishments.

According to Odaudu, Senator Hadi Sirika, since assumption of office as Minister of Aviation, has made it a point of duty to hold regular consultations with Stakeholders in the industry including Airline Operators, Labour unions, service providers, regulators etc, especially on the implementation of the Aviation roadmap which was put in place by the Buhari administration.

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Foreign Airlines Trapped Funds Rise to $743m, as Aviation Minister Assures IATA of Intervention

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By Aduku Odaudu

Despite government’s past efforts to tackle the issue of blocked funds of foreign airlines, the amount has increased to $743,721,097 from $662m in January 2023, the the International Air Transport Association has reported.

In a letter presented to the Minister of Aviation, Senator Hadi Sirika, signed by the Regional Manager West and Central Africa, Dr Samson Fatokun, IATA called on the minister to intervene so the foreign airlines can repatriate their funds.

“For over a year, Nigeria has been the country with the highest amount of airline-blocked funds in the world” the letter indicated.

IATA reckoned that the “trapped funds sends a strong message against FD! The increasing backiog of international airlines blocked funds in Nigeria sends a strong message against foreign direct investment (FD!) in Nigeria. Potential investors are reading from the plight of the airlines that they would not be able to expatriate their funds from Nigeria even al this moment when Nigeria is expecting investments in the concession of some of its prominent airports.”

Dr. Samson Fatokun said that it’s important Nigeria respect contractual obligations Foreign airlines fly into Nigeria within the legal framework of the Bilateral Air Service Agreement (BASA) signed between their countries and the Federal Republic of Nigeria.

The IATA/Foreign Airlines delegation with Senator Hadi Sirika and the Permanent Secretary, Dr Emmanuel Meribole

He noted that it is agreed in those BASAs that Nigeria will facilitate the repatriation of.the funds.

He said this has also led to high-ticket prices to mitigate the increasing backlog of these funds in Nigeria and its impact of their cash flow, some airlines have decided to reduce the number of their frequencies, or the number of seats made available for sale in the Nigerian market.

Commenting, the Minister of Aviation, Sen. Hadi Sirika said the “government is concerned especially the ministry of aviation. I am sure you are all aware that this is not a problem that is currently within the leverage of the ministry of aviation if it were to be here it would be resolved today.”

“Unfortunately, it sits somewhere else more with the Central Bank of Nigeria who in turns keeps saying it is between them and the commercial banks” he further explained.

“We will do the very best we can to resolve this matter soon” he promised.

“We will begin from today, we have been doing the best we can because we understand the importance of the services being provided and also the legitimacy of the request because it is something that is backed by the Bilateral and multi-lateral Agreements and something that is the law itself so there is no reason why it should continue to remain” he assured.

Aviation Permanent Secretary, Dr Emmanuel Meribole, Minister of Aviation, Senator Hadi Sirika and the IATA Regional Manager for West and Central Africa, Dr Samson Fatokun during the visit

He also urged the airlines to bear with certain situations, adding that the way they deal with the matter is not the best way to deal with issues of sovereign and in this case some of the airlines that decide not to come to Nigeria, it is a commercial decision you take which is fine but to do other things to show some resentment to the country is not acceptable.

“Some go to the extent of saying that they are not allowing Nigerians to go or no visa issuance which I think is anniversary and uncalled for; we do know that we need your services but we are very convinced that you need our market more that we need your services. I think Nigeria should be treated with some level of dignity and honour” he quarried.

“From your document here Qatar Airways has $208m blocked, Ethiopian Airline with $117m blocked. These are the major tickets and IATA $216m which is the highest while Emirates is $35m” he said.

“I know certain payments have been made. At some point when we decided to closed down Abuja airport for rehabilitation and to move to Kaduna. All of you foreign airlines refused to go to Kaduna which shows that you are only interested in what you can gain from a country which is the money but you are not willing to give anything.

“Some of you approached me and said you do not have were your crew will stay so you can fly to Kaduna. But we provided hostels that were better equipped than most hotels in town, good catering services, still you refused to identify with us”

He charged them to always adopt the give-and-take attitude in business relationships.

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