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IATA says Nigeria’s aviation needs help, laments access to Forex

  • Aviation runs on dollar-Fatokun

 

 

The International Air Transport Association (IATA) has called for urgent assistance for the country’s aviation, stressing that the entire aviation value needs help to stay afloat and be profitable.

This was the view of IATA’s Area Manager, West and Central Africa, Dr. Samson Fatokun when the group presented the IATA certificate of membership to United Nigeria Airlines that has been showing promise since the carrier was set up on February 12, 2021.

The aviation industry in Nigeria, according to him needs help, noting that the Nigerian government needs to provide that help.

IATA

Fatokun noted that the dollar is the language of global aviation, stressing that a situation where the carriers find it extremely difficult to access the United States currency for their operations puts enormous constraints on their existence.

The aviation industry he said is suffering because of access to foreign exchange which he described as very acute at the moment.

He further disclosed that IATA had been appealing to the Federal Government to come to the rescue of the carriers, adding that the issues associated with foreign exchange is not peculiar to international carriers but even to domestic carriers

“Even though they are flying in this market; almost 90 percent of their revenue is in local currency and they have to attend to their costs which 90 percent are dominated in dollars. How do you want them to maintain their aircraft without having access to foreign exchange? The dollar is the currency of civil aviation. You cannot change it. That is how it runs globally.

“You don’t buy aircraft in Naira, you don’t maintain aircraft in Naira, you don’t train your crew or do a simulation in Naira. It is not possible”. The currency of the industry is the dollar and our government needs to understand that”.

He noted that if the government really wants to support the sector, there must be in place a clear line of foreign exchange supply, stressing, “You cannot have an industry supporting the whole economy that is a catalyst or the blood-nerve of the industry that makes it to exist is being denied”.

“This industry runs on foreign exchange. The Nigerian government needs to support the aviation industry. We know that it is not the only sector of the economy that is suffering but the impact here is more acute than some other sectors and that is why we have been appealing to the Nigerian government to really look into this in addition to other issues.

“That comes high on the agenda and we hope that very soon, we are going to have a plan from the government to see how to address them”.

Speaking on airlines’ trapped funds, the IATA chief said there were issues of legacy debts before the Bola Tinubu administration came into power while the over $700 million trapped funds had risen, saying that the I &E window that IATA and airlines have been directed to is ill-liquid because the Banks cannot get money from the I & E window.

“How do we sell this? Even if you have to solve the backlog, what is the plan forward so that we don’t come back to this again in the near future? There must be a way or strategy. How do we help this industry? The aviation industry in Nigeria needs help and the Nigerian government needs to provide that help”

Foreign airlines in flight

“Each country looks at how to support their industry. We have had support in different ways before but we need more support. The aviation industry wants to play the role of a catalyst to support social growth in Nigeria but we need help. One of the key areas of help is access to foreign exchange. The problem is still an acute shortage of foreign exchange. We have been discussing with the Federal Government to find a solution to that.”

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