According to a report cited by Bankole Bernard, Chairman of the Airlines and Passengers Joint Committee of the International Air Transport Association, foreign airlines operating in Nigeria generated about $1.1 billion in revenue in 2022 despite difficulties with foreign exchange.
Bernard also stated that the high demand for domestic travel within Nigeria is expected to sustain the $1.1 billion revenue generated from travel in Nigeria. He expressed faith in the numbers’ ability to hold constant in the foreseeable term. The Central Bank of Nigeria was urged to release $717,478,606 in airline cash by the Senate in a resolution that was just passed. The upper house also requested that the CBN distribute $25 million from its twice-weekly dollar auction to Nigerian airlines.
Responding, Bernard stated that the Senate may not intervene, adding that the CBN had already shown disregard for the law by only complying with a court order to release the old notes.
“The CBN is not going to do anything. We find ourselves in any environment that is full of anarchy. Anarchy is a state of confusion where there is a total disregard for the law. It took the court to summon CBN to comply with even releasing the old notes, and you now think the Senate will talk to them and they will listen. Let’s be sincere with ourselves and stop fooling around,” he argued.
When asked if any of the impacted airlines may stop operating as a result of the stranded cash, he responded, “Unfortunately, they cannot stop operating. They didn’t purchase the plane so they could store it. They will take the aircraft there if they can transport it somewhere more profitable. Don’t be fooled; the reason they continue to see our business as viable despite these difficulties is the honesty we must all face. They continue to come because our market is still a viable option. But it does not imply they are without difficulties.
The CEO and Managing Director of Finchglow Holdings, Bernard, revealed that certain airlines have begun selling tickets in dollars, adding that the exchange rate for the conversion had gone up significantly.
“They have started selling in dollars. Not only are they selling in dollars, the exchange rate for the conversion has gone really high. It is 640/$, which is closer to the black market rate,” he said.
Kingsley Nwokoma, the spokesperson for international airlines operating in Nigeria, also reacted, warning that if the Nigerian government does not move quickly to return the cash, airlines may be compelled to leave the nation.
Nwokoma emphasized that foreign airlines’ requests for money to be repatriated had been a long-standing problem in Nigeria, and their inability to do so had had a negative impact on their operations, profitability, and ultimately their desire to continue operating there.
He claims that numerous airlines have either stopped operating altogether or reduced the number of flights as a result of being unable to repatriate their cash.
Nwokoma claimed that if the government does not immediately begin the process of repatriating the trapped funds, more airlines would leave the country.
Speaking on the possibility of the CBN to begin disbursement of the funds following Senate’s order, he said, “You will not see that happen with the limited days of this tenure because it has been a while the airlines have been clamouring for these funds and we have seen the consequence, airlines are leaving. More airlines are planning to leave if these funds are not repatriated.
“Before we start to talk about whether it will be in tranches or whatever mode, there has to be that willingness from the government to the airline. It has to say it has this amount of money, and it wants to make sure that everyone gets the money according to the BASA regulation. If any of the airlines have been called or there had been any mechanism to begin any disbursement, the airline would have made a statement.”