GBAJABIAMILA CLAIMS FOREIGN AIRLINES HAVE VIOLATED FOREX REGULATIONS

Yesterday, the Speaker of the House of Representatives, Hon. Femi Gbajabiamila, said that international aircraft operators were in violation of the CBN's (Central Bank of Nigeria) current foreign exchange restrictions.

Gbajabiamila made this statement during a discussion about the blocked $700 million that belonged to foreign airline operators and other issues brought up by the Airline Operators of Nigeria (AON), including capital flight, violations of the bilateral air service agreement (BASA), and the high cost of tickets/fare imposed on Nigerians, which is estimated to be about 50% higher than nations like Ghana and South Africa, among others.

Earlier in his speech, Prof. Obiora Okonkwo, Chairman of United Nigeria Airlines and spokesperson for the AON, requested to know how much foreign airlines charge for tickets and flights. He claimed that international airlines were fond of pressuring the CBN to grant them foreign currency at the official exchange rate of N447 after receiving payment at the N740/$ parallel market rate.

The airline operators also charged that foreign airlines have prohibited Nigerians from using debit cards to pay for tickets, accusing the International Air Transport Association (IATA) officials of favoritism in the application of policy and regulations.

Dr. Samson Fatokun, the area manager for IATA in West and Central Africa, claimed that foreign airlines had been requesting the return of a $700 million blocked fund since 2020 in response to claims that they had broken BASA and IATA rules regarding payments made in dollars.

For his part, the speaker said: We need to seek for solutions in the meantime. I'll also beg international airlines to act with integrity. And what really constitutes good faith, and how do you demonstrate it？

To open up your portals or whatever it takes to keep things running smoothly so that Nigerians may buy your tickets so that the travel agents can continue working while this is happening.

Therefore, we are doing ours here while you are doing yours there. It can't be a one-way street. Therefore, we can allow ourselves some time so that whenever things resume as they were, we can look at ways to repatriate you or retrieve your money. We will work to find a solution, whether it requires special involvement or something else.

“So, for lack of a better term, it has to be symbiotic, and as well as accomplish our end and you need to do your end within some good faith assurance from you,” he continued.

“When Fatokun yelled indignantly, ”It is not stated in any BASA that they must sell in dollars or not, Airlines are not expected to sell in dollars, and they should not do so. This is a CBN policy.

By his own admission, the Speaker insisted that laws were being broken in a legal manner. You did mention that they are not permitted to offer foreign cash per BASA rules approximately an hour ago.

Okay, so it's a Nigerian legislation, not a BASA rule; however, certain laws are being broken. After hearing that, the question is whether to follow BASA or CBN legislation. Having said that, let me continue to give airlines a very gentle nudge by asking them to inform their employees that they are in violation of CBN laws.

And I'll also ask you to maintain the status quo while we look into the situation. When it is finished, it increases our desire to try and help.

Additionally, he added: In the BASA you have several rules and some fall under economic regulations and then we, the Civil Aviation authority of each country, regulate.

Therefore, we know that all airlines are not permitted to sell in dollars in Nigeria in this specific example of selling in a specific currency. Informed of that.

No airline wants to sell in dollars if it has a guarantee, but it might be persuaded to do so if you can be sure you can get the money back when it's due. How come they should do that？

You see, what we are going through is a response, and I can say that it's a response to how long this money has been withheld.

From March 2020 to 2022, we're talking. So, let's talk about the problem after that has any operator—I don't want to be sentimental. Will you continue to put yourself at risk of having more money stopped if you've had your money blocked in a system for more than a year or two？ The answer to that fundamental query is what the airlines are taking.

Since we're in this predicament, assuming it doesn't violate any laws, one thing you might think about doing is talking to the NCAA and the gasoline suppliers to see if it's possible to utilize some of this naira fund instead of dollars to pay for things.

He stated, This you have told us is in breach of the IATA laws on charging, not allowing selling tickets in foreign exchange, in response to the IATA in-country Manager's claim that he cannot make a decision on the problem. Everyone counts on you to ensure enforcement. You are aware of it. When it is already known to us that you as a manager who understands the law don't allow them to violate laws because it is Nigeria and that you are in a setting where laws are being made, it is insufficient to say that they must consult their countries before making a decision. So, if you could, IATA, don't decide to execute the legislation in Nigeria or not.

The In-Country Managers don't have the last word in operations, and their responsibilities don't extend beyond that, Fatokun said in response to the Speaker's suggestion that the foreign airlines return to the status quo. They must return to their corporate headquarters to relay that information before responding.

Speaking about the frozen fund, Mr. Chima Ihe, Deputy President of the National Association of Nigeria Travel Agencies (NANTA), said: From the travel agencies' perspective, we are begging with the government to see how they can let the airlines access this fund. Mr. Obiora claims that this money can be recycled, but I want to disagree. This is an operating cost, not a profit that you may inquire about.

“However, there is a significant issue with the gap in airfares and our inability at this time for travel firms to access airline inventories in order to issue tickets. In order for the travel firms to access their inventory and make reservations, he added, ”I want to ask that you assist us in asking the airlines to open the inventory.

Additionally, Mrs. Adetutu Otuyalo, the Regional Commercial Manager for British Airways, denied a claim that international airlines require payment in dollars to purchase tickets.

But she continued: Two years ago, anyone with a Nigerian card could successfully make reservations on British Airways. I can vouch for that. However, the banks have now restricted the use of Nigerian credit cards. Before, you could do 1,000, $2,000, or $3,000 operations on those cards. However, you could certainly spend $100 on those cards right now.

The Speaker did mention that an enlarged meeting would be held on Thursday so that the Governor of the CBN, the Ministers of Finance, Budget and National Planning, and Aviation, as well as other regulatory bodies, could make well-informed decisions.