As part of its commitment to finding a solution for the stranded fund, which is now close to $500 million, the Lower Chamber of the National Assembly has pleaded with foreign airlines to offer cheap travel options to the Nigerian market.
As part of its efforts to free up stranded airline funds in the nation, the House of Representatives, led by its Speaker Femi Gbajabiamila, also invited the Ministry of Aviation and the Central Bank of Nigeria (CBN) to a Thursday stakeholder meeting.
Gbajabiamila noted that the difficulty of foreign airlines to repatriate monies has resulted in harsh penalties from the airlines during a meeting with the foreign airlines, International Air Transport Association (IATA), Airline Operators of Nigeria (AON), and travel agents on the trapped fund.
But moving forward, he declared: “We need a two-way solution to this. On our part, we will find a way, by intervention or others, to have the funds released. While we are looking for that solution, I will also request the foreign airlines to exercise good faith by returning to the status quo.
“Unfortunately, the other parties (Aviation Ministry and CBN) could not be here because of the two-day ministerial session going on. But we will invite them to be here to also have their own submissions. We need to find a lasting solution to ensure that we do not continue to pile up such funds,” Gbajabiamila said.
The main problem, in fact, has been the foreign airlines’ inability to convert their ticket sale revenues into dollars for repatriation. The foreign airlines are unsatisfied despite the CBN just releasing $265 million of the $464 million trapped, total.
In spite of concerns that certain foreign airlines have blocked local access to sale platforms or have rejected naira in favor of other currencies in violation of local laws, foreign airlines have continued to withdraw reasonably priced travel tickets from the Nigerian market.
IATA Regional Manager Dr. Samson Fatokun told the gathering that the stranded fund situation was embarrassing for the nation because it had 36% of all stranded funds in its control.
The current issue, according to Fatokun, began in March 2020 when $700 million was stuck in Nigeria until $265 million was released.
He referred to the assertion that foreign airlines were transacting in foreign currency as incorrect. The problem is that it is now simpler to purchase tickets from outside than in Nigeria due to local bank restrictions on the usage of credit cards for payment.
“Unfortunately, all of these are market reactions to the blocked fund’s realities in Nigeria. But on the appeal on foreign airlines to make booking platforms available to Nigerians and travel agencies, country managers will have to seek such approvals from their parent airline offices,” Fatokun said.
Susan Akporiaye, president of the National Association of Nigerian Travel Agencies (NANTA), previously stated that it was the unfortunate fate of Nigerian travelers to purchase an average six-hour Economy Class ticket for between N1.5 and N2.7 million as a result of the blocked fund. Over a 25% increase from the rate sold in other areas of the world, the Business Class variation sells on average for N4 to N5 million.
The problem has almost gotten out of hand, according to sources who spoke to The Guardian, and travelers, travel agents, and the entire sector are in despair.
“Government’s negligence is the biggest worry for all of us. Not only has the government failed to engage the airlines and other stakeholders concerning the stuck fund, but most disappointing is the Central Bank’s comment that foreign airlines are not its priority. Really? Then, something is fundamentally wrong with us as a people and NANTA has decided to take the matter to the National Assembly next week Monday,” one of the sources offered.
