IATA appeals to FG to assist foreign airlines on trapped funds - NIGERIAN TRIBUNE
OCTOBER 26, 2023
THE International Air Transport Association (IATA) Area Manager, West and Central Africa, Dr Samson Fatokun, has described the dollar currency as the language of global aviation, stressing that a situation where the carriers find it extremely difficult to access the dollar for their operations puts enormous constraints on their existence.
This came just as he said the foreign airlines’ trapped funds in Nigeria had issues of legacy debts before President Bola Tinubu’s administration came into power, while the over $700 million trapped funds had risen.
Describing the I &E window that IATA and airlines have been directed to access as ill-liquid because the banks cannot get money from the window, the IATA representative used the opportunity to call for urgent assistance for the country’s aviation, in order to make it stay afloat and be profitable.
The aviation industry in Nigeria, according to him, needs help from the government by making available foreign exchange, which he described as very acute presently.
According to him, the entire sector is suffering due to the lack of access to forex, which he said is not only peculiar to foreign carriers but also domestic airlines.
While appealing to the Federal Government to come to the rescue of the foreign carriers by ensuring their trapped funds were paid, the IATA representative declared:
“Even though they are flying in this market; almost 90 percent of their revenue is in local currency and they have to attend to their costs which 90 percent are dominated in dollars. How do you want them to maintain their aircraft without having access to foreign exchange? The dollar is the currency of civil aviation. You cannot change it. That is how it runs globally.
“How do we sell this? Even if you have to solve the backlog, what is the plan forward so that we don’t come back to this again in the near future? There must be a way or strategy. How do we help this industry? The aviation industry in Nigeria needs help and the Nigerian government needs to provide that help.”
“You don’t buy aircraft in Naira, you don’t maintain aircraft in Naira, you don’t train your crew or do a simulation in Naira. It is not possible. The currency of the industry is the dollar and our government needs to understand that.”
He said if the government really wants to support the sector, there must be in place a clear line of foreign exchange supply, saying; “You cannot have an industry supporting the whole economy that is a catalyst or the blood-nerve of the industry that makes it to exist is being denied.
“This industry runs on foreign exchange. The Nigerian government needs to support the aviation industry. We know that it is not the only sector of the economy that is suffering but the impact here is more acute than some other sectors and that is why we have been appealing to the Nigerian government to really look into this in addition to other issues.