As Nigerian Government continues to sit on foreign airlines funds, former Director-General of the Nigerian Civil Aviation Authority (NCAA) Dr. Harold Demuren has proposed that certain categories of air tickets be sold in dollars.
Currently Nigeria is in loggerheads with foreign airlines over $464 million trapped funds.
Demuren, while speaking at the Aviation Round Table (ART) second quarter 2022 Breakfast Business Meeting, with the theme, “Perspective in Multi-Layer Aviation Security System and Passenger Facilitation”, in Lagos on Thursday said as a way out of the conundrum, the Federal Government should allow foreign carriers to allow passengers in First Class and Business Class cabins to pay for tickets in United States dollar while passengers in economy class can pay in Naira.
The former NCAA chief said doing this would greatly help the carriers to repatriate their funds with ease and put a stop to the issue of trapped funds or at best, help to significantly eliminate the problem, particularly at a time the country is not earning enough dollars to meet with the myriads of pressure on foreign exchange.
Demuren’s position sits with that of the foreign carriers that had initially planned to start asking passengers from Nigeria to start paying for their tickets in dollars to avoid a situation that the Central Bank of Nigeria (CBN) is incapable of helping them for now to repatriate their accumulated funds.
Airlines on APG Interline Electronic Ticketing Agreements (IET) GP code 275 had in April this year disclosed that it would start accepting issuing of tickets in United States Dollars and not Naira.
This new policy according to the group was caused as a result of the difficulty in repatriating airlines’ huge funds stuck in Nigeria and other countries coupled with foreign exchange
APG IET gives travel agencies the facility to issue a much wider range of airlines and flight combinations than would otherwise be available via your GDS.
In a swift reaction, the APG airlines within 24 hours rescinded the decision after the CBN planned to wield the big stick against the airlines for going against the country’s policy that goods and services must be paid for in the country’s currency.
To cut its losses, South African Airways (SAA) on August 9, 2022, adjusted its ticket sales from Naira to dollars, announcing that it would start selling tickets originating outside Nigeria in dollars but tickets sold in Nigeria would still be sold in Naira.
Asked if allowing foreign airlines to charge dollars for tickets sold in dollars for First Class and Business class won’t amount to hurting national pride, Demuren said, “Listen to me. You must take emotions out of it. When people leave the shores of Nigeria, do they spend? Naira. The people in the First and business classes are people who have money, and who can pay in dollars due to the current forex crisis. I know that there is a pride in national currency and I believe that there is a wild disparity between Naira at the official and the parallel markets and one which leads to speculation. It is dangerous”.
“This problem needs to be solved and we must stop this problem. Your family is abroad? Ok, you will go by boat to go and see them when the airlines stop operation. They have money but they can’t take it out. It is not done in other places. You need to cut your losses. What I am saying is that we can solve it. The Minister of Aviation, DG NCAA, and Minister of Finance are working on it. They are sitting down to look at it. It will keep growing”.
“You know Varig Airlines; that is why they left the country. They did not come back. Other people left and did not come back. At the end of the day, if they don’t get their returns, it is not good business for anybody to do. We have to face it. If the government has a solution, that is great. They must work together. This government didn’t cause it. It is a problem we have. If Nigeria is selling oil, we will have a lot of oil. We have to make sure we solve it together”, he added.
President, ART, Dr. Gabriel Olowo said that in view of the current security deterioration and challenges in Nigeria on farmlands, religious places, road, and rail transportation, it was pertinent for the group to continue to discuss the security situation in the industry.
Olowo lamented that the various communiqués arising from the past breakfast meetings of ART were not implemented by the government, but insisted that would daunt the body from continuing to propagate safety and security in the sector.
Grp. Capt. John Ojikutu (retd) in his paper ‘Civil Aviation Security Defence Layers and Airport Passengers’ Facilitation,’ also said that the Abdulmutallab incident led to increased security apparatus in the industry in Nigeria.
He, however, decried the multiple security desks in the sector, stressing that it was discouraging travelers and investors into the country.
He emphasised that there were some lapses in the profiling of Abdulmutallab by the various bodies from the Department of State Security (DSS) immigration, Aviation Security (AVSEC), and even the airlines.