About 21 foreign airlines operating in Nigeria are hopeful, as the value of ticket sales owed them in Nigeria has been reduced by over 40 percent, the International Air Transport Association (IATA) said yesterday.
The IATA said it was making progress to recoup billions of dollars in revenues blocked by some countries, as it put foreign airlines’ funds stranded in the Nigerian economy at $700 million as of July this year.
It would be recalled that in March 2016, the tightening economic policies of the Central Bank of Nigeria (CBN) impacted airline operators negatively, as many airlines were unable to repatriate $700 million.
CBN’s increase in dollar sales in March and April led to external reserves haemorrhaging thereby resulting to restricted sales of cheap ticket classes in naira.
Experts say this development has caused customers to re-order their priorities by flying local carriers, and some international airlines such as Iberia Airline and United Airline stopped operations into Nigeria.
In a letter to its trade partners, Kola Olayinka, regional commercial manager, Iberia Airline, said it was a tough decision that had been taken by its head office due to the wide acceptance the airline had received from passengers, especially those heading towards Spain and Latin America over the years.
According to Jonathan Guerin, United Airline spokesman, “Repatriation has been a significant issue, as has been the downturn in the energy sector.”
However, Olayinka told BusinessDay that things had improved and the CBN came out with quite a smart and forward looking proposal that could help the airlines grow their businesses again.
On the other hand, IATA also appealed to the Nigerian government to respect international agreements obliging them to ensure airlines were able to repatriate their revenues.
The funds were proceeds from sale of tickets by the airlines in the last seven months, which could not be repatriated due to Federal Government’s policy on foreign exchange.
