14 airlines close shop in Nigeria amid forex hike
• Foreign firms lose N64b repatriating stuck funds
• NCAA begins fresh certification of airport screeners
No fewer than 14 airlines have withdrawn their services from the country due to low patronage on account of the economic recession.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.
Meanwhile, to improve security at airports nationwide, the Nigerian Civil Aviation Authority (NCAA) has made mandatory the fresh certification of all aviation security screeners.
The directive, according to NCAA, is in accordance with the provision of the International Civil Aviation Organisation (ICAO) Certification System (Annex 17 Standards 3.4.3) for aviation security personnel and the requirements of National Civil Aviation Security Training Programme (NCASTP).
The exercise covers airport workers, who include security personnel responsible for the screening of passengers, cabin baggage, cargo, courier, mail and other items with the use of x-ray screening equipment prior to the boarding or loading of baggage and cargo onto an aircraft or movement to restricted areas.
The NCAA said: “Any person prior to being designated as an AVSEC screener in Nigeria, must obtain certification from the NCAA.”
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38 Comments
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we will get out of this mess by our kindergarten leaders who are not experience in the arts of management of the economy, they are so far from the feeling of the population. always living on hope, can someone tell them that you don’t run an economy on hope.
The wind of change is indeed blowing across the land. Sai Buhari!
Truly Sai Buhari. On he can stop unnecessary spending. No more stealing people’s money to travel abroad.
It’s like under change, everyone is a thief if you buy nice things or want to live a nice life. Meanwhile, Mrs Buhari, a housewife, has $100,000 to spend on a hand bag. Her husband is not stealing, you say.
Na you know where you got your Tory about the bag.
That bag is the talk of the town right now and like that cartier watch during swearing it, she hasn’t denied it. Poor people indeed.
Travelling abroad u say? Like spending billions to subsidize hajj, right?
Our government is making it very difficult for us to do business..
Except if your business is 419, no business is made difficult. If you buy expensive, you sell expensive. QED!
I don’t think you have a background in business management. Who are you going to sell your expensive products to?
How would I get knowledge about business when you have collected all that was there?
Who is typing this for you because the level of ignorance you exhibit suggests you shouldn’t even be able to read!
Spoken like a truly ignorant buffoon
No. Spoken like a paid pdpig agent trying to bring the end of sanity restored
Do you live in present day naija
No. I’m in the international space center.
I guessed as much ….lucky you
Oh! God don’t let us be trapped in Europe and and else were in the world due to bad governance!! Amen,,,,
Who asked you to go there in the first place? Stay at home and buiid your homestead. You run away leaving others to do the work for you. You’re coming back to meet that which you ran away for.
I don’t blame u. You are enjoying subsidy left and right in the North,.. JAMB cut off mark, Marrriage, Hajj, Rail transportation fee. (All these with very low IGR). Restructuring is on the way!!
Who and what stopped you from coming to join us enjoy, before your phantom “restructuring”
‘cos I don’t want to reduce myself to ‘Almajiri’, moreover, I hate dependency syndrome. I love hardworking people.
Just that we reject being products of baby factory, and we had rather beg than to become kidnappers, armed robbers, or internet scammers
It seems you are not even following up. US declared (almost )the whole Northern states unsafe, why?. Do you have anything special you fight to protect?.NOTHING!!. Kidnappers, armed robbers, religious extremists etc are having a field day. Your Herdsmen cannot even allow fellow northerners to farm,.. killing them at will . And you are here ranting, depending on the south to foot your bills.
Mr. Follow-up, 70% of last month’s monly allocation came from non-oil sources. Keep dreaming.
I’m not talking of oil,….how much did your state generate out of this 70%?
detail please.
Musa musa… Musaaa!, how many times did I call you?.. Do not make yourself the attack dog, whitewashing other people’s dirty laundry… be warned!
Bafra is the answer.
But they ought to get the change @ #197 which was the February rate. But come to think of it, in February these guys were waiting for the #130 government rate. Now they have to change it @ a higher rate. Hard luck.
‘promise and deny effect’
Sai Buharia
first of all, those airlines should invest the money in the country. Second, this should be an advantage to Nigeria based airline. They should use this time to ramp up their capacity, capture market share and improve their services.
Sweet words but how realistic is it in the face of harsh government policies that don’t support business growth
how do you think investors will come into the country when foreigners who are in the country are losing their money because of government unsteady policy, buhari policies scared foreign investors, we better get idea about how things work,
They have been milking the Niger Delta for years but cannot stand loosing one cent? They are lucky that Nigeria is a stupid country.
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