Relief as CBN releases $265m to foreign airlines

The Central Bank of Nigeria on Friday, released $265m to airlines operating in the country, to settle outstanding ticket sales to check a brewing crisis in the country’s aviation sector.

There have 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.

International airlines operating in the country have been raising airfares and reducing flights over their inability to repatriate funds to their home countries.

Emirates Airlines had announced the suspension of its flight operations in Nigeria from September 1, 2022, while fears had increased that more airlines may follow the same step.

According to the CBN,  breakdown of the figure indicated that $230m was released as special foreign exchange intervention while another $35m was released through Retail SMIS auction.

Disclosing this in a statement, the Director, Corporate Communications Department, CBN, Mr Osita Nwanisobi, said the Governor, CBN, Godwin Emefiele, and his team were concerned about the development and what it portends for the sector and travelers as well as the country in the comity of nations.

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.

British Airways suspends ticket sales over trapped funds

United Kingdom mega carrier, British Airways, has stopped travel agents in Nigeria from selling their tickets amid the difficulty of foreign airlines to repatriate over $464m ticket sales proceeds to their respective home countries.

This came as the Central Bank of Nigeria on Friday announced the release of $265m out of the N464m trapped funds to the foreign carriers.

A breakdown of the figure indicates that the sum of $230m was released as a special FX intervention while another sum of $35m was released through the Retail SMIS auction.

However, BA in a notice to travel agents in Nigeria on Friday said the ticket distribution firms would no longer be able to make new bookings or service existing bookings made in Nigeria.

The UK airline did not specify the reason for the decision nor did it state how long the suspension of ticket sales by Nigerian travel agents would last.

BA however said it was committed to the Nigerian market and would not stop flights to the country.

The development means Nigerian passengers seeking to fly the UK carrier may have to go to the airline’s website to book flights and possibly pay with local or foreign debit cards.

The notice to the travel agents, which was obtained by Saturday PUNCH, read in part, “We’ve had to make some temporary changes to the way we sell our inventory in Nigeria. As a result, trade partners are currently unable to make new or service any bookings made in Nigeria at this time.

“Existing bookings may still be serviced on both a voluntary or involuntary basis through our Global Engagement Centres and lines. Once a ticket has been revalidated or reissued, British Airways will take ownership of the booking. We remain fully committed to serving the Nigerian market and apologise for this temporary adjustment in operations.”

The development came barely a week after Middle East carrier, Emirates Airlines, announced the suspension of flights to Nigeria effective September 1, 2022. The Dubai-based carrier linked the development to the inability to repatriate $85m ticket sales proceeds.

The International Air Transport Association, the Switzerland-based global body representing international airlines, had last week warned Nigeria that more carriers might suspend flights to Nigeria if the government failed to address the repatriation of the $464m trapped in Nigeria.

Article first published on the Punch Website

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