‘Why Blocking of Foreign Airlines’ $591m Ticket Funds?’

By Primus Chuks Igboaka – Cleveland, Ohio.

Nigerians are used to breaking News. This time the news is not just breaking, but their short and long- term implications for Nigeria that is looking for alternative sources of foreign exchange to substitute falling oil prices and revenue to the country and the president’s campaign on corruption is huge.

The news of foreign airlines departing the country is not all that positive for the country about heading into recession.
High priority attention is required to address this problem, which I have not seen coming from either the administration or the Ministries concerned with making these ticket money available to these airlines.

The reality is that when foreign airlines leave any country as they are doing or threatening, they are going to eliminate the bridge between one space and another, or to completely isolate an entire country such as Nigeria.

This should be a big concern to the APC administration and the lack of any reaction publicly from either the government, Central Bank; the Aviation & Information Minister indicate that nobody cares.

First, it was Virgin Atlantic Airline that announced that it will stop flight to Nigeria; then the United Airlines officially cancelled its flight to Abuja with plans to refund passengers their fares on the Houston, Lagos and Abuja routes.
The Spanish Airlines and its national carrier, Iberia also halted its flight to Lagos; the British Airline with over 60 years of operation to Nigeria, operating since Nigeria gained her independence from Britain in 1960 has also joined the airlines threatening to suspend flights to Nigeria; Air France, Qatar Air and Etihad have all given two months notice and warning that they will stop operations as soon as the deadline expires.
You ask – what is going on? Who will like to hold these airlines to ransom knowing that these airlines are multi –billion corporations themselves with multi – business interests in other fields that their government sees any threat on them as threat to their arm of diplomatic corps?. Similarly, considering that Nigeria needs travels, tourism and hospitality business to diversify its economy, does the silence of government indicates that it does not care about the economy? Since oil prices – Nigeria’s main source of foreign exchange is also falling on the global market on a daily basis, and there seems to be no irreversible ways to get out of the failing prices (as pundits predicted), does common sense not make Nigeria and its leaders understand that travels, tourism and hospitality which foreign airlines are their promoters should be the way to go? Therefore treating these foreign airlines well should be the first step towards growing alternative economy for Nigeria that focuses on travels, tourism and hospitality as income generators for the economy? These steps, with all honesty, I have not seen the administration address or show that it is taking it seriously. It becomes worrisome, knowing that falling global oil prices is setting Nigeria on recession course, and government reaction (with plans for alternative sources of earning foreign exchange) will give citizens the hope that the administration is doing something, which for now seems not to be the case.
Furthermore, any regime with concerns for its travelling population and Diaspora in particular ( in absence of any national carrier) should not be implementing policies that scare away or threaten foreign airlines, instead should embrace policies that attract more foreign airlines to the country by creating hubs for their operation in Nigeria to other parts of East, West, North and South Africa, knowing that these airlines are preferred transportation for business and government officials that the Buhari’s regime needs to boost the economy.
Similarly, on the campaign by the administration against corruption, the president needs the good will and symbiotic official and personal relationships with not just the leaders of countries that some of these airlines are their national flag carriers, but have other business interests such as banks and other financial institutions they owned, and could provide a lead or assistance in tracking or providing information about Nigeria’s stolen $400 billion dollars in overseas banks and financial institutions?

However, which direction one looks at this situation, it boils down that the President should mandate the CBN to release and enable foreign airlines have access to “their ticket money” totaling about $591 million dollars. In fact, any critical mind will also ask, why holding back this insignificant amount of money at this critical time in the country, knowing that over $500 billion dollars (B as in billion dollars) annual global travel, tourism and hospital business that these airlines attract could benefit Nigeria? It is the best idea to allow foreign airlines take paltry $591 million (M as in million dollars) and in the long run assist Nigeria have access to $500 billion floating and waiting to be directed to any country or countries that have good relations and good will with management of these foreign airlines. Nigeria needs the boast; An economy that has long depended on oil that its global market prices has become unpredictable and will not improve for a long time according to Power and Energy experts.
Similarly, the decision by the federal government to withhold the release of $591 million belonging to these airlines since 2015 becomes more disturbing and violates all that the president represents or presents himself to leaders of the world, at a time the president has travelled to these foreign countries – flagging his integrity and steadfastness. In essence, the president must also realize that major corporations that own the airlines or their affiliates are huge cash-cows for dollars and pounds; they are corporations these governments depend on, like taxes paid by these airlines and their sub-business units include banking, manufacturing and services to sustain their economies. They are unhappy with the administration withholding their sources of tax incomes which the Western leaders depend on to sustain their economies. What message the president is sending to these countries that owned these airlines or corporations that are tied to governments is yet unknown?
As we know, presidents of these countries prefer to travel by their national airlines than presidential fleets which some of them have in limited number or none at all. The withholding of the ticket money to these airlines reveal that either the administration or the president is ignorant about the role of airlines, aviation and international diplomacy that links politics to the global economy of $500 billion airlines, aviation and tourism sectors – most of which is promoted by these international airlines through their good will or marketing or interests to direct their long – devoted passengers on which locations they should take their next vacation, thus moving capital to such preferred destination or country. This situation becomes more relevant, and attention must be paid to settle these airlines; the administration must make it top priority considering that Nigeria has no national airline, and the private airlines operating in the country are incapable of meeting customers’ demands, even if it is only for Nigerian Diaspora traveling through and from Europe and United States either as business travelers or as visitors.
Therefore, in Nigeria where the main source of revenue is oil and oil revenue is no longer dependable to sustain Nigeria’s economy, any concerned leader will likely explore the travels, tourism and hospitality business sectors to mop up foreign exchange to avoid the country heading into a recession (which economists have indicated it is already happening).
The administration must therefore pay attention to the requests of these airlines and authorize immediate release of their – ticket money made from passengers in the country more than a year ago.

Therefore, allowing the airlines leave the country is not an option. It is a far-reaching mistake with dire short and long-term consequences that must be avoided from escalating.
Withholding ticket revenue of these foreign airlines is like Buhari’s administration or the government biting the fingers that it needed most to improve the economy. PMB needs that good will and reciprocity from foreign governments in his war against corruption and holding money and taxes that these airlines pay also to their home countries or the government where their headquarters are located is not a good idea. As a journalist friend queried jokingly, the president wants countries to repatriate politicians and office holders already in Europe and United States and Dubai to fly these “fantastically corrupt’ officials home – what airlines does the president think they will be flown home when the time comes? It is either the British Airways or the United Airline that has threatened or has already left the country. While this may be a joke, but at the same time, he makes sense, because, officials of the United States or the European Union flying into Nigeria does not use the presidential jet rather their country’s flag carrier or their countries’ airlines based on safety, trustworthiness and insurance in case of accident or mishap.

How could the president reverse this policy? The reality is that the president and APC administration need the foreign airlines than the foreign airlines needed Nigeria (at least as at the moment). I have since my ten years experience as an Aviation correspondent undoubtedly learned that airline routes are one of the prime indicators when a country’s socio-economic status is improving, or when it is heading in the wrong direction. Similarly, it is a sign of the geo-political influence that one state exerts into another; thus, airlines are the first geo-political agents that have the power to suspend or completely terminate a destination, consequently, eliminating the bridge between one space (Nigeria) and another (countries these foreign airlines operate their flights), or completely isolating an entire country (Nigeria). It is the least thing President Buhari’s administration wishes to bequeath Nigeria at this time .
There is no doubt these foreign airlines will fly investors into the country. It would therefore be foolhardy to thinks that these foreign investors will travel with Nigeria airlines or national carrier which Nigeria has none at the moments. The president needs to know that good positive relationship with the management of these airlines is very vital public relations campaign that should involve not just the Ministry of Aviation, but the Information Ministry and the presidency.
Therefore, if the decision to withhold airlines money in Nigeria prevails, it is Nigerians’ air-travelling public and the Diasporas who do not have access to the presidential jets that suffer most under this unfortunate situation. We have already seen this with increases in airfares on flights to cities in the United States and European Union. Furthermore, Nigeria’s economy will remain stagnated since Diaspora movements, business and private remittances are more viable and reliable than revenues from oil. In essence, it is mark of failure and lack of economic plan from this or any administration to wait this long and deny the foreign airlines access to their sources of revenue or money to service other high operational costs to keep their planes on air throughout the year.
The problem becomes more concerning when the federal government forgets to understand and see with the airlines that the rate on return of capital invested in the air transportation industry for the knowledge of the president and the Central Bank is among the lowest sources of income compared to the other business sectors. Meaning that overall, airlines gain little from transportation of passengers (or ticket sales) to maintain their huge cost of operation. Multiple taxes and charges are often higher than the price of tickets, despite the fact that most of the levies airlines pay is unrelated to the development of the sector.
These costs are separate when considered that Airlines are required to modernize their fleets of airplanes, and also achieve emission targets which take lots of their revenue. In essence withholding this paltry amount of $591 million ticket money means that the federal government is expecting these airlines to run operation of their aircraft fleet in and out of Nigeria from money they realized elsewhere. This is unfair in either business or moral sense; it is like robbing Peter to pay Paul.
The president should gain the goodwill of foreign leaders on his war against corruption and most importantly show respect and dignity to management of these airlines.

Primus Chuks Igboaka, Ph.D. MBA was former Airport and Aviation Correspondent for the defunct National Concord. Currently, he is a professor of Communications at Lorain County Community College, Elyria, Ohio and Kent State University Kent, Ohio. He resides in Cleveland, Ohio, U.S.A.

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