British Airways & Emirates Shut Down: What It Means For Nigerians
The Nigerian aviation sector has suffered from low patronage and airlines shutting down. However, the most alarming that left everyone in a mellow panic was when international airlines started closing their inventory over trapped funds.
If you plan to travel to the United Kingdom and the United Arab Emirates, you may find yourself in a fix. Emirates and British Airways have closed their inventories on Nigeria operations within days.
Since these airlines cannot repatriate their trapped funds in the country, they have shut down to cut down on expenses. The oldest Airline in Nigeria aviation, British Airways (BA), stated that it would not be selling new tickets until the airline's impasse with regards to trapped funds is resolved.
British Airways Statement
"Our flights continue to operate as scheduled. British Airways remains fully committed to serving the Nigerian market. However, we have been impacted like many other airlines."
Emirate Statement
Emirate is suspending all flights to Nigeria on 1st September to limit future losses. However, the statement indicated Emirates was ready to return as soon as the issue was resolved:
“Should there be any positive developments in the coming days regarding Emirates' blocked funds in Nigeria, we will, of course, reevaluate our decision.”
National Association of Nigeria Travel Agencies (NANTA) Statement
“The National Executive Council of NANTA just concluded a business meeting with British Airways and British Airways conveys assurance that it remains committed to servicing the needs of travel agencies in Nigeria.
“As members may be aware that British Airways closed inventory this morning, please be informed that this inventory closure is a necessary action taken by British Airways to mitigate the increase of their trapped funds.
“However, British Airways provides reassurance that it is still flying in and out of Nigeria and is currently seeking earnest solutions to address the demands of its customers.
“Details on how existing tickets will be serviced will be communicated soon”
How Much Money is Trapped?
Nigeria blocked airlines from repatriating over $460 million, which left carriers unable to gain the revenue they made from ticket sales in the country. However, Nigeria is not the only country keeping airline ticket sales.
For instance, Zimbabwe is holding onto $100 million, Algeria $96 million, Eritrea $79 million, and Ethiopia $75 million.
What Does This Means?
Airlines have raised their ticket prices. Therefore, Nigerians now pay three times more than travelers from other countries for the same destinations.
According to IATA’s regional vice president for Africa, Kamil Alawadhi:
"Airlines cannot be expected to fly if they cannot realize the revenue from ticket sales. Loss of air connectivity harms the local economy, hurts investor confidence, and impacts jobs and people's livelihoods. It's time for the Government of Nigeria to prioritize the release of airline funds before more damage is done."
The Secretary General of the Aviation Safety Round Table Initiative (ASRTI), an NGO, John Ojikutu, said:
"We are going to be the loser if the foreign airlines withdraw their services because about 70% to 80% of our earnings in commercial aviation are from foreign airlines. Nigerians will go to Accra, Cotonou, and Lome to connect to the flights of these foreign airlines, making them hubs over Nigeria."
The president of the National Association of Nigeria Travel Agencies (NANTA), Susan Akporiaye revealed:
“British Airways has not stopped selling tickets rather they removed inventory from the global distribution system (GDS)."
What Does Removing Inventory From GDS Mean?
“That means travel agencies can’t issue tickets from their portal but you can book online on their site.
“Even if you go to their office they can’t issue a ticket for you. You only have the option of booking online.
What Does BA’s Planned Suspension Mean?
BA does not have plans to stop flying in Nigeria. Akporiaye stated that it is the CBN’s restrictions on the amount that can’t be spent on the Naira debit card that is the issue.
“We can only spend $100 dollars using your naira debit card which nullifies the use of buying tickets in naira.
“It’s our policy that is putting us in this mess, it’s not the fault of the airlines at all.
How Nigerians Are Affected
Most Nigerians depend on their debit cards to pay for online transactions billed in US dollars, the $100 restriction placed by CBN has made it impossible for air passengers who only have naira cards to purchase air tickets in naira.
These restrictions have left most air passengers with the option of purchasing tickets using their dollar cards, thus, raising insinuations that airlines are now selling tickets only in dollars.
Nigeria Action
Nigeria’s Minister of Information and Culture, Lai Mohammed said:
“On the trapped funds, I can tell you that the relevant authorities are working hard on that issue.”
The Central Bank of Nigeria has released $265 million to airlines to settle outstanding ticket sales to prevent the looming crisis in the aviation sector.
A breakdown of the figure indicates that $230 million was released as special foreign exchange (FX) intervention, while another $35 million was released through the retail SMIS auction.
The Director, Corporate Communications Department at the CBN, Osita Nwanisobi, said the apex bank, Godwin Emefiele, and his team, were concerned about the challenge and what it portends for the sector and travellers.
Nwanisobi reiterated that the CBN was not against any company repatriating its funds from the country, adding that what the Bank stood for was an orderly exit for those that might be interested in doing so.
The Future
With this funds release, it is expected that operators and travellers as well would heave a sigh of relief. With Pay4Me App, you can make some of your international transactions without difficulty.