Foreign airlines’ trapped fund and its lessons

AFTER the barrage of criticisms and pressures mounted on the federal government to settle the over $600 million funds of the foreign airlines trapped in the Central Bank of Nigeria (CBN), the government last week harkened to the numerous clarion calls to release $265 million as part payment of the accumulated funds.

Prior to the released funds, the entire sector and in extension the global aviation community had been at the center stage of buck passing  following the controversy the trapped funds generated from both within and out of the country.

The accumulated funds emanated from statutory air transport services rendered by the over 27 foreign airlines operating into Nigeria to the Nigerian traveling public expected to have long been repatriated to the home countries of the foreign carriers longest time.

As stipulated in the Bilateral Air Service Agreements (BASAs) signed between Nigeria and the home countries of the foreign airlines, it was clearly stated that under no conditions should the foreign airlines be prevented from taking out their funds.

Little wonder the hullabaloo the issue generated with the failure to release the funds, thus making air travel procedures and and even international businesses for many Nigerians becoming  difficult in an already saturated environment due to the actions taken by the foreign airlines to save more cost.

Such actions taken by the foreign carriers include; stoppage of the sales of low inventory, restriction of sales in Naira and the high rise in air fares amongst others which drastically put many Nigerians in a tight financial predicaments.

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Besides the hardship put on the traveling public, travel agencies’ sector was thrown into a tougher situation that almost crippled their business activities in view of many travelers now forced to shift their patronage to neighbouring countries where cheaper fares were available.

The shift in patronage to the neighbouring  countries besides leading to the loss of funds that would have been accrued to Nigeria through the sales of tickets, greatly impacted the travel agencies and the subsequent reduction in their income.

At the receiving end of the controversy were the lower class travelers who could not afford to pay the exorbitant fares on the international routes where an economy Class ticket rose to over N2 million.

Even when the different key players including foreign bodies like the International Air Transport Association (IATA) called on the government to settle the airlines and treat them better, the body language of the government then was not encouraging.

Things were almost getting out of hands with Emirates announcing its plans to suspend operations into Nigeria September 1st, 2022 while other carriers threatened to pull out before the end of the year before it dawned on the government the subsequent international implications its lackadaisical attitude may have on the generality of Nigerians.

Amidst the thickened tension and uncertainty, the forex the government had hitherto said was not available suddenly appeared leading to the release of $265 million with  an outstanding of $300 million.

The release of the part payment which would have been more deserving if it had come earlier, unfortunately came after it had put all the major key players on one hand in a serious tension and the entire Nigeria’s credibility in a bad shape before the international community.

Without doubt, the events that had unfolded in the recent months over the trapped funds must have taught the government particularly its officials the lesson that while you may get away with the shenanigans happening locally, you dare not replicate same laxity and get away with it on the international scene.

Presently, many places the name of Nigeria comes up regarding investments, the story is not that encouraging as it is generally believed that the government does not honour agreements.

With the issues generated by the trapped funds, it is hoped that government will henceforth learn that it’s not all issues particularly as they affect aviation that can be localized since the rules guiding the principles of engagements and agreements are based on international standards.

With the release of the part payment, it is however hoped that the foreign carriers will acknowledge one fact that they on one side and Nigeria both need each other to survive. In other words while the Nigerian citizens need the airlines to travel, the airlines on their side need the Nigerian huge market to remain in business. Therefore, whenever an issue like the trapped funds rears its head, there should always be windows for understanding and tolerance.