The House of Representatives leadership, on Monday, intervened in the dispute between Nigeria and foreign airlines, stressing the need for local airlines to be given a level playing ground as their foreign counterparts in the sector.
The meeting, which was chaired by the Speaker of the House, Femi Gbajabiamila, also had in attendance representatives of the airlines, International Air Transport Association (IATA), Airlines Operators of Nigeria (AON), travel agencies and other aviation industry stakeholders.
A number of industry issues, including the issue of reciprocity in the number of flight slots allocated to Nigerian and foreign operators; the disparity in ticket prices charged by the foreign airlines in Nigeria and other countries; inability of Nigerians to access the portal of foreign airlines as well as the difficulty in funds repatriation.
Gbajabiamila said: “The whole idea is to see how to resolve whatever issues there are because you are all in business, and business has to move on but business cannot move on without funds.”
On the issue of foreign airlines’ blocked funds, he said the House will liaise with relevant authorities to ensure the funds are released.
The Chairman House Committee on Aviation, Nnoli Nnaji, argued that the Nigerian aviation sector deserves reciprocity in operations, saying: “Foreign airlines are exploiting Nigerians to the extreme! Nigerians should not be allowed to be exploited for things they know nothing about.”
The Area Manager, West & Central Africa, IATA, Dr. Samson Fatokun, informed that airlines’ block funds of about $700 million were trapped in Nigeria. “One of the biggest challenges facing the aviation sector is the repatriation of funds,” he said, adding that this is a big disincentive to investors in the sector.
Recall that in August, IATA alleged that as of July about $464 million of foreign airlines funds were trapped in Nigeria, after which the CBN later released $265 million to them to settle outstanding ticket sales.
The whole idea is to see how to resolve whatever issues there are because you are all in business, and business has to move on but business cannot move on without funds.
Cost disparity
Also commenting, the Spokesperson for AON, Prof. Obiora Okonkwo, argued that cost disparity was killing local airlines, adding that foreign airlines’ monies were not blocked but in the banks.
He noted that the cost of tickets were already very high, as foreign airlines were converting tickets based on the parallel markets rates instead of the Central Bank’s.
Okonkwo asserted that even local airlines cannot use their monies because they do not have access to foreign exchange. “To create a window for foreign exchange, we must be considered. We need to look inwards.”
He added that other countries are supporting their airlines post COVID-19, but the only support the sector has had is $4 billion from the Nigerian government, which is grossly inadequate.
The Chief Executive Officer, Airpeace Airlines, Allen Onyema, said Nigerian airlines were not against foreign airlines repatriating their funds, and criticised the ticket disparity.
He said: “We must begin to love ourselves. How do you explain that someone flying nine hours from South Africa to London pays less than a Nigerian flying six hours?”
A representative of the travel agencies, China Ihe, insisted that paying for flight tickets in dollars is affecting Nigerians economically, and urged foreign airlines to open their portals to enable Nigerians to buy tickets locally and affordably.
Adjourning the meeting, Gbajabiamila emphasised the need for all parties to make a commitment to end the crisis by addressing the various issues raised, especially with regard to international flight operations.
The meeting is expected to reconvene tomorrow, to allow for input from the CBN and the Ministry of Foreign Affairs on how to fast-track the release of the trapped funds.
