Almost one year after the foreign airlines faced the challenge of blocked funds in Nigeria, the carriers are still struggling to repatriate their $600 million trapped funds in the country.
This is as Delta Air Lines confirmed that it now sells air tickets to Nigerian travellers in the United States dollars, saying this was part of the Bilateral Air Service Agreement (BASA) arrangements it has with the Federal Government.
This is as the Reporter learnt that the trapped funds of the foreign airlines may have grown to over $600 million, while the hope of repatriation is slim.
A source close to one of the airlines confided in the Reporter on Monday that the trapped funds of combined Ethiopian Airlines, Emirates and British Airways was over $300 million, while the least trapped funds among the carriers was $12 million.
The source stated that as at November, the Federal Government through the Central Bank of Nigeria (CBN) promised that the debts would be paid by December, but expressed worry that so far, none of the airlines had received the guarantee of payment despite the intervention by the International Air Transport Association (IATA).
Also, The Reporter gathered that Ghana, another country with trapped funds of foreign airlines, may have cleared all its outstanding debts and funds released to the concerned carriers.
The source said: “The government said they would pay the airlines by December, but when in December is what we don’t know. Each airline has different trapped funds here in Nigeria. It is IATA that is relating with the ministries of Finance and Aviation.
“The smallest of the trapped funds of the airline is $12 million. Emirates is over $100 million and that was why they pulled out. Also, Ethiopian Airlines, British Airways are in that range of $100 million each because they are doing the same volume. One of the airlines with the smallest flights into Nigeria got only $1.3 million the last time that the CBN made some payments, which is very small.
“Inasmuch as you are flying, your debts continue to pile up. We need dollars to pay for our equipment. So, it is not easy for the airlines. The cost of operating flights into Nigeria is borne 80 percent by the headquarters. The proceeds are not from here. I just hope this one is settled soon or else, most airlines would leave this country.
“Ghana doesn’t owe any airline any longer. Your money cannot stay two months in Ghana despite the fact that they are having same challenge as Nigeria.”
Also, Mr. Jimmy Echelgruen, Delta Air Lines’ Sales Director for Africa, Middle East and India, told Daily Independent in Lagos on Monday that the airline now sell air tickets to travellers emanating from Nigeria in dollars to avoid the continuous rise in its trapped funds in the country.
Echelgruen said that the BASA agreement the United States government signed with Nigeria allowed it to sell air tickets either in dollars or naira, stressing that the airline had not violated any known law in Nigeria.
He explained that the trapped funds of the airline in Nigeria were “enough to give us worry.”
Echelgruen, however, said that Delta Air Lines would not contemplate suspending flight services out of Nigeria because of the trapped ticket sales funds, stressing that the airline was committed to serve the Nigerian routes.
He said: “What we have done is that we are now connecting through issuance of tickets in US dollars because that is the way that we can continue with our service uninterrupted. We are allowed to do that with the bilateral agreement between the US government and the Nigerian government and we are providing adequate availability to passengers from Nigeria to all over the world.
“With this, we have opened up more inventories allowing for passengers to travel with us, but they need to pay in dollars. We will continue to operate as normal and our load on our flight is still very good.
“There is no grey area and it is part of our agreement. The agreement says we can collect in either naira or US dollars. We now sell our seats in dollars and that is going to be the case until we are able to resolve this crisis.”
He was, however, silent on the specific amount of funds of Delta Air Lines trapped in Nigeria.
Just recently, the National Association of Nigeria Travel Agencies (NANTA) warned that the failure of the foreign airlines to repatriate their ticket sales from the country was in flagrant contradiction to the BASA arrangements the Federal Government reached with foreign countries.
In line with BASA with countries, airline tickets are sold in naira, while the airlines repatriate the funds in dollars through the country’s central bank.
No fewer than 25 foreign airlines operating into Nigeria are involved in the challenge of fund repatriation.
Some of the major carriers affected by the crisis included British Airways, Etihad, Emirates, Lufthansa, Air France/KLM, Delta Air Lines, Virgin Atlantic, United Airlines, RwandAir and Ethiopian Airlines.
Commenting on the development, Mr. Kingsley Nwokoma, President, Association of Foreign Airlines and Representatives in Nigeria (AFARN), decried that the issue had been a recurring decimal in recent years.
Nwokoma in an interview with the Reporter lamented that the difficulty of the foreign airlines to repatriate their ticket sales was affecting their performance, especially aircraft maintenance, but noted that it is a global phenomenon.
The AFRAN president appealed to the Federal Government to intervene in the situation before it deteriorated further.
He said: “This issue has been prevalent, but unfortunately, the government has not been able to address this. The airlines need to repatriate money to their home countries because they operate from their home countries.
“Imagine if other countries are like Nigeria that doesn’t allow other countries to repatriate their money, it will lead to a total collapse of the airlines. So, it is something that the government has to look into and get it sorted out once and for all.
“It won’t be nice to sell tickets in dollars. We can sort it out. It is a government thing and the government and its agencies should look into it.”
Source: independent.ng