Toba Owojaiye reporting
Abuja, Nigeria
Amidst the recent sharp depreciation of the Nigerian naira against the dollar, concerns have arisen regarding the financial repercussions for foreign airlines operating within the country.
Truth Live News gathered that the International Air Transport Association (IATA) has voiced apprehension over potential losses amounting to an estimated $200 million for these airlines. Kamil Al Awadhi, IATA’s Regional Vice-President for Africa and the Middle East, expressed these concerns during an interview with CNBC.
The issue of trapped funds has been exacerbated by the currency depreciation, with reports indicating that over $700 million of foreign airlines’ ticket revenue remains inaccessible in Nigeria. Despite assurances from the Central Bank of Nigeria regarding the settlement of verified debts owed to foreign airlines, IATA contests this claim, asserting that significant funds are still trapped in the country.
In response, local travel agents, represented by the National Association of Nigerian Travel Agencies, have issued a warning to foreign airlines, demanding the release of lower fares in their inventory or facing severe consequences. IATA’s Vice-President stressed the importance of fairness, emphasizing that airlines should not be unfairly penalized by the lower exchange rate.
Mr. Kingsley Nwokoma, President of the Association of Foreign Airlines and Representatives in Nigeria, echoed IATA’s concerns, urging the government to fulfill its payment obligations. He proposed establishing an arrangement with airlines for periodic payments as a viable solution to the financial challenges they face.
The ongoing depreciation of the naira, which has seen a plunge from about 900/dollar to over 1,400/dollar at the official market, has sparked worries among industry stakeholders. Passengers, seeking more affordable options, are reportedly turning to neighboring countries like Togo and Ghana for their travel needs.
While the Central Bank of Nigeria recently announced the completion of payments for verified claims by foreign airlines, challenges persist as stakeholders grapple with the impact of currency fluctuations on the aviation industry. Debts are being settled at prevailing exchange rates, adding to the complexity of the situation.