Foreign Airlines Demand Standard FX Rate – Thisday

Chinedu Eze

International carriers that operate to different destinations in the country have called on the federal government to give them standard exchange rate for the repatriation of revenues earned from ticket sales or they would be forced to leave Nigeria.

The Sales Manager of Emirates Airlines, Eghe Ekhator, issued the threat, why explaining the reasons why the airline decided to stop operations to the Federal Capital Territory (FCT) from October 22, 2016 during the on-going public hearing on how to revamp the aviation industry organised by the House Committee on Aviation.

Ekhator explained that due to the flunctuating value of the naira, when they sell ticket in the local currency, by the time they will exchange it to the dollar, it would lose its value. He said that the airlines have decided that the only way they could continue to operate in Nigeria would be for government to peg the naira for the airlines.

The House Committee Chairman on Aviation, Hon. Nkiruka Onyejeocha said the House was worried about the suspension of flights to Nigeria by foreign airlines and the number of domestic carriers that had gone under, noting that there are indications that more might stop operation.

Asked why Emirates decided to stop its operations to Abuja, Ekhator said: “The challenge we are facing is not unique to Emirates. The major point is forex. Another problem is the runway at the Abuja airport. The runway issues may be addressed but for now it is still a concern.

“Another problem is aviation fuel. There is no long- term assurance, which means that a flight can come and it won’t have fuel to depart. Emirates is losing money running into millions of dollars. The delay before we exchanged the ticket sales reduces its value because the naira is not pegged. For example, if you sell ticket for $1000 and collect its equivalence in naira by the time you exchange it you may have only $600 dollars because of the floating exchange rate. So the foreign airlines are losing millions of dollars this way. That is why some are considering pulling out their operations,” he said.

Onyejeocha however suggested that the government should introduce and implement policies that would enable airlines both foreign and local have profitable operation in Nigeria, noting that the foreign airlines are requesting for fixed rate of the naira for them so that they could exchange their money without losing any value.
At the public hearing, the Managing Director of Chanchangi Airlines, Trevor Worthington identified the challenges facing airlines in Nigeria and noted that the one of the major problem of the airlines is low aircraft utilisation due to poor infrastructure.

According to him, while aircraft in other parts of the world could operates for 22 hours, in Nigeria airlines hardly get up to 12 hours. He also noted that multi-taxation, high cost of aviation fuel and the fact that international operators are allowed to operate to many airports in the country, thereby discouraging code-share between foreign carriers and domestic operators.

Worthington urged the federal government to make a policy that foreign airlines should code-share with Nigeria airlines that meet their safety standard.

Speaking in the same vein, the Director of Engineering, Medview Airline, Lookman Animaseun said that many Nigerian airlines are now in the International Air Transport Association (IATA) registry as they have become certified after going through the stringent IATA Operational Safety Audit (IOSA), which qualifies them to code-share with any airline in the world.

Animaseun urged government to stop the multiple designation of foreign airlines and to facilitate the establishment of a major Maintenance, Repair and Overhaul (MRO) facility in Nigeria.