Things are not rosy in the country
at the moment; a statement which applies to the aviation industry as 14 foreign
airlines exit the Nigerian market. The airlines are
believed to have withdrawn
their services due to low patronage and the bad economy being experienced in
the country. Those affected include Spanish-owned Iberia airlines, United
Airlines and Air Gambia among others.
The airlines are said to have lost about N64 billion in the wake of the new
foreign exchange (forex) policy of the Central Bank of Nigeria (CBN). The loss was
on account of repatriating $800 million stuck in the economy in the last one
year, but released after the recent devaluation of the naira. With the
devaluation, the accumulated $800million from airlines’ ticket sales, when the
exchange rate was still at N197 to $1, was taken out of the country at the new
rate of N320 to $1. Consequently, a substantial amount was lost in the last
couple of weeks. To this effect, Kola Olayinka, the regional manager of British
Airways, said that for every $1m repatriated since the new policy began, the
airlines lose not less than N80 million.
It
will be recalled that President Muhammadu Buhari administration last year
introduced a fiscal policy through the CBN, restricting access to foreign
exchange and funds transfer out of the country. The policy has affected the
International Air Transport Association (IATA) members with estimated $600
million belonging to operators in Nigeria stranded. The association has since
appealed to government to ensure the immediate release of such funds to
operators in the Nigerian aviation sector.
Definitely,
such withdrawal will come with its consequences especially to travelers on
specific routes provided by these airlines. And if nothing is done in earnest
to improve the situation, more airlines might be forced to toe this line to
save their business from a financial meltdown.
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