Low value of Naira and the inability of foreign carriers to repatriate their revenues have forced United Airlines and others to withdraw services to Nigeria.
As at March 31, 2016, foreign airlines funds trapped with the Central Bank of Nigeria (CBN) was about $575 million and there are strong indications that the airlines would lose substantial value of this money with the devaluing of the Naira by the federal government which has become imminent.
It is projected that if government devalues its currency, foreign airlines may lose about 45 per cent of their revenues with the CBN.
This, experts believe, is one of the reasons why some of the airlines are pulling out of Nigeria and this would also trigger another wave of outrageous fares in their bid to get back what they have lost.
On Thursday United Airlines expressed its plan to stop flights to and from Nigeria and Air France, Qatar and Etihad have also issued a two-month revenue warning on tickets sold in Naira which they must be allowed to repatriate or they would pull their flights from the country.
In April Spanish national airline, Iberia announced it would pull out of Nigeria and wound down its operations by May 12. The airline explained that it pulled out of Nigeria following protracted passenger drought since late last year.
Iberia said its decision to leave Nigeria was in response to the difficult times and the inability of the airline to record high load factor as it used to do, as economic crunch bedeviling the nation had depleted the finances of those who otherwise would travel out of the country on business, tourism or leisure.
The International Air Transport Association (IATA) during its conference in Abuja on Monday said it had been talking with the federal government on how to repatriate airlines funds trapped in CBN.
Thisday reports that foreign airlines stopped repatriating their revenues as at when due since October last year due to the dollar shortage in the country brought in by the low earnings from crude oil sales.
Industry experts have expressed the view that more airlines may be tempted to pull out of the country if the hard time continued.
Inside source told Thisday that the load factor was not good because of the financial crunch, which had kept potential travelers out of the airports.
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