No fewer than 14 airlines have withdrawn their services from the country due to low patronage on account of the economic recession.
The airlines, including Iberia, United Airlines and Air Gambia, are among the 50 that operated the Nigerian routes some months ago.
Besides, foreign airlines operating in the country are estimated to have lost about N64 billion in the wake of the new foreign exchange (forex) policy of the Central Bank of Nigeria (CBN).
President
of the National Association of Nigeria Travel Agencies (NANTA), Bankole
Bernard, said that the new forex policy and economic crunch came with enormous
negative effect on travel agencies, the reason for which they exited the
country.
Bernard
had, at the Aviation Round Table (ART) breakfast meeting held in Lagos
recently, said that travel agencies that sold about $1.4 billion worth of air
tickets in 2015 were beginning to record losses with the departure of the
airlines, adding that there was fear that more airlines might quit flying the
Nigerian routes.
Apparently
frustrated by the low patronage, he said that some of his members were
beginning to consider relocating to Ghana, where “their policies are
consistent.”
Bernard
said that the alleged inconsistent policy of the current administration,
particularly on the naira devaluation, accounted for the current “nightmarish”
experience the airlines are facing.
The
loss of N64b by the foreign airlines was on account of repatriating $800
million stuck in the economy in the last one year, but released after the
recent devaluation of the naira.
With
the devaluation, the accumulated $800million from airlines’ sales of tickets
when the exchange rate was still at N197 to $1, was taken out of the country at
the new rate of N320 to $1.
Consequently,
a substantial amount was lost in the last couple of weeks.
Confirming
the development, the Regional Manager of British Airways, Kola Olayinka, said
that for every $1m repatriated since the new policy began, the airlines lose
not less than N80 million.
Olayinka
blamed the situation on what he called the immediate and unfortunate effect of
the new policy, which is affecting all foreign airlines that had funds sitting
in the Nigerian banks.
The
current administration last year introduced a fiscal policy through the CBN,
restricting access to foreign exchange and funds transfer out of the
country.
In
the process, the International Air Transport Association (IATA) estimated that
no less than $600 million belonging to foreign airlines was stranded in
Nigeria. The association appealed to government to ensure the immediate release
of such funds.
Aviation
sources estimate that Delta and United Airlines have up to $180 million hanging
in the Nigerian economy, while Air France-KLM is estimated to have over $150
million. British Airways has about $100 million as at March 2016, while Iberia,
which had already withdrawn its services, has $5 million of its funds trapped.
Olayinka
expressed regret that the effects of the new policy are quite unfortunate, but
a price to be paid for “the economic realignment”.
ART
President, Gbenga Olowo, noted that some airlines lost up to 50 per cent of
their funds due to the forex policy.
Olowo,
however, stressed that the foreign airlines remained a major stakeholder in the
aviation industry, citing that they account for about 90 per cent of the air
passenger traffic in the country.
He
said even if the foreign airlines continued to leave, it would still not be to
the advantage of local carriers like Arik and Medview, since their fleet
capacity is too low to accommodate the traffic.
Olowo
appealed to government to be consistent in its policy and ensure that operators
have an enabling environment.
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