In a move to check a brewing crisis in the country’s aviation sector, the Central Bank of Nigeria (CBN) on Friday, August 26, 2022, released the sum of $265 million to airlines operating in the country, to settle outstanding ticket sales.
A breakdown of the figure indicates that the sum of $230 million was released as special FX intervention while another sum of $35 million was released through the Retail SMIS auction.
Confirming the release, the Director, Corporate Communications Department at the CBN, Mr. Osita Nwanisobi said the Governor, 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.
Mr. Nwanisobi reiterated 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 the outstanding sale of tickets.
It would be recalled that due to the trapped fund, Emirates airline announced the suspension of its flight from September 1at, 2022, thereby, making stakeholders call for the release of the trapped fund.
With yesterday’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 the outstanding sale of tickets.
Stakeholders commend move…
Some stakeholders have commended the Central Bank of Nigeria (CBN) for injecting $265million into the nation’s aviation sector. This action, the stakeholders said would bail out some of the foreign airlines from the shortage of dollars.
A Professor of Economics at the University of Ibadan, Prof. Lanre Olaniyan, described the gesture as a welcome development. According to Olaniyan, some of the airlines that threatened to pull out of the country’s aviation sector will now have a rethink.
He, however, said that the inability of the airlines to repatriate their monies in the first place would affect confidence. “It is a welcome development, but like any other business, confidence will be low. Confidence is what makes businesses to thrive. “Most of the airlines will now be treating Nigeria with caution, ” he said.
According to Mr Okechukwu Unegbu, a former President of the Chattered Institute of Bankers of Nigeria (CIBN), the apex bank only did what it ought to have done earlier. He described the release as debt that was being repaid, adding that the release could even have implications for the country’s foreign exchange reserves. “The CBN ought to have settled the problems with the airlines before it got out of hand,” he said.
A personnel of a foreign airline, Isaac Olanipekun, commended the CBN for taking bold steps to solve the dollar crunch facing the aviation industry. He called on the Federal Government and the CBN to ensure that such a situation does not recur.
Leadership reports however that stakeholders are worried that the federal government may be playing to the gallery. They fear that the release may be on paper in other to persuade the foreign airlines not to exit the country.
They called on the federal government to as well release foreign exchange to local operators in other to bring down the high cost of operation incurred by airline operators.
In a chat with LEADERSHIP Weekend, chief operating officer, Aglow Aviation, Tayo Ojuri, disagreed that the release will lead to the return of suspended flight service to Nigeria, arguing that Emirates and other foreign airlines have made their business decisions.
He expressed hope that the fund the government announced it has released will not be only on paper but on reality.
“I don’t think this will make them rescind their position because Emirates airline prior to this time had met with the nation’s Vice President, CBN and had done all the negotiations, put IATA in copy and nothing was done.
“So, even if something was being done, no feedback from the government to the airlines to know whether something was being done about it and they should look forward to solving the issue during a certain time from the government. We don’t have to be reactive every time.”
“The airlines weighed their options and based on that option, they made business decisions. So I don’t think all of a sudden because they said they will leave on the 1st of September and on the 26th you released the fund that will stop them.
“Also, don’t forget that this release is on paper. We don’t know the process it will take for them to have access to the money, so by the time they calculate their money, they will check if it is worth it for them to stay. Again, I hope government is not playing to the gallery and let us see that they will release it.
“By the time they see the payment they will know the direction to go. They have done what they ought to do, the negotiations and when they didn’t see any way forward they took the business decision,” he said.
On his part, the secretary general, Aviation Round Table Initiative (ARTI), Olumide Ohunayo, said even though it was good news, he hopes the airlines that have announced suspension of their operation will continue operating in and out of the country.
He said, “It is good news. It is also a win-win situation and in whatever name they want to call it, whether intervention or special fund, it is a good one for the company. It is the appropriate thing to do and I hope the foreign airlines as well as their association International Air Transport Association (IATA), see this as a piece of good news and forgive us for all our iniquities of the past and see how we can restore those foreign flights to their full schedules and where they are before to see if they can lower the fares now.
“Again, there was a call from British Airways and government responded. This should be extended to domestic airlines to take care of their operational expenses that have been hanging. This is time to support domestic airlines for their operational expenses to get those dollars at the official rates. The CBN should pay directly to organisations foreign airlines want to get the equipment from”.
Also, the president, Aircraft Owners and Pilots Association of Nigerian (AOPAN), Alex Nwuba, said the release is a step in the right direction.
Nwuba, in a chat with LEADERSHIP Weekend, said the release was a reprieve for foreign airlines and will stop Emirates Airlines from suspending its flight operations to Nigeria.
He said, “The release of the fund shows willingness on the part of the government.”
