BAD news never seem in short supply in the nation’s aviation sector, these days. The latest report that some foreign airlines operating in the country are threatening a gradual withdrawal of operations from selected routes should be a matter of serious concern to the government.

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The airlines are complaining about their inability to fully repatriate their funds that are stuck in the Nigerian economy. These funds are proceeds of ticket sales   said to have accumulated to about $400 million (about N160 billion) as at November 2016.  The amount built up after the airlines repatriated $300m between June and September, this year. The foreign airline operators have blamed their plight on what they termed “unfavourable forex policy” of the Central Bank of Nigeria (CBN). The policy mandates the airlines to sell tickets at the rate of N308 to the United States dollar (USD), while they mostly   repatriate the ticket takings at the rate of N386 to the dollar.
Things are now said to have come to a head. The airlines have listed three major airports where they are considering withdrawing their operations. These include Nnamdi Azikiwe International Airport, Abuja, Mallam Aminu Kano Airport, Kano and Port Harcourt Airport in Rivers State. The measure, the operators said, “is to cut losses on account of trapped funds and the unfavourable foreign exchange policy” of the CBN.
Already, some of the foreign airlines have withdrawn their operations. They include Turkish Airlines, Emirates and Kenyan Airways. These airlines have also closed their Abuja offices since September this year. This is an unsavoury development in Nigeria’s aviation and tourism industry. Only recently, many domestic airlines were forced to suspend operations as a result of paucity of funds and operational costs.
If the airlines make good their threat, it will have profound implications for international travel in the country. One immediate implication is that Nigerians outside the Lagos route will have a difficult time as they will spend more to connect international flights.
Undoubtedly, airline business is a capital intensive enterprise, and getting forex to repatriate funds remains one of the daunting challenges facing foreign airline operators. The Nigerian office of the International Air Transport Association (IATA), the central clearing house of over 260 airlines around the world, has confirmed that repatriating funds from Nigeria remains agonisingly slow for foreign airlines.
We, therefore, urge the CBN to expedite action on the special forex sale planned for airlines in the country. It is worthy to recall that prior to the CBN’s introduction of the flexible forex policy in June 2016, foreign airlines reportedly had over $600 million trapped in the Nigerian economy. IATA is negotiating for the release of the funds.
But, while we welcome the ongoing negotiations on the matter, the CBN should treat the special forex sale with all sense of urgency. The apex bank had last Monday, December 19, asked  banks to submit bids for a special currency auction to clear the backlog of matured outstanding dollar obligations for selected sectors of the economy.
This special arrangement, known as secondary market intervention retail sales, was made following a meeting in October between the Minister of State (Aviation), Hadi Sirika, and the CBN Governor, Godwin Emefiele. Under the special forex intervention sales, $600m is expected to be made available monthly through the Airlines Operators of Nigeria (AOP) using the official forex rate.
Although this arrangement is not exclusively for airline operators, we advise that their case be given utmost priority to avoid disruptions in, or a complete withdrawal of their operations from Nigeria. Henceforth, CBN should be proactive on critical matters relating to operators in critical sectors of the economy, such as aviation. It should not wait until situations reach a boiling point and the operators are about to collapse or relocate from the country.
This matter should be resolved as quickly as possible, especially at this festive season when all the major airports in the country are witnessing a high traffic of passengers in and out of the country.
lynching and all others in the country as a challenge, and resolve it. Let them quickly do the needful and redeem the image of the very important institution they represent on the problem of jungle justice in the country.