Forex Problems 14 airlines shut down in Nigeria as recession persists

These airlines, which include Iberia, United Airlines and Air Gambia, are among the 50 that operated Nigerian routes just a few months ago before the recession hit hard.

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No less than 14 airlines have shut-down their services in Nigeria due to low patronage because of the economic recession, according to media reports.

These airlines, which include Iberia, United Airlines and Air Gambia, are among the 50 that operated Nigerian routes just a few months ago before the recession hit hard.

United Airlines play

United Airlines flight

(Punch)

 

Apart from that, Guardian Online reports, foreign airlines operating in the country are estimated to have lost about N64 billion since the start of the new forex policy of the Central Bank of Nigeria (CBN).

Bankole Bernard, president of the National Association of Nigeria Travel Agencies (NANTA), said the new forex policy and the bad state of the economy came with a substantial negative effect on travel agencies, which is why they have decided to exit the country.

Godwin Emefiele play Central Bank Of Nigeria Governor, Godwin Emefiele (REUTERS/Afolabi Sotunde/File Photo)

 

At an Aviation Round Table (ART) breakfast meeting held in Lagos recently, Bernard said travel agencies that sold about $1.4 billion worth of air tickets in 2015 were beginning to record losses as the airlines packed up shop.

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Bernard also said that, out of frustration, a lot of the members of his Association were already starting to relocate to Ghana where "their policies are consistent."

The N64 billion loss is a result of an $800 million repatriation of funds stuck in the economy for the past year, but released after the recent devaluation of the naira.

Kemi Adeosun with President Muhammadu Buhari play

Nigeria's finance minister, Kemi Adeosun with President Muhammadu Buhari

(The Cableng)

 

Confirming this sentiment, Kola Olayinka, regional manager of British Airways, said that for every $1 million repatriated since the new policy began, the airlines lose not less than N80 million.

Last year, the Buhari-led administration, through the CBN, introduced fiscal policies which was restricting access to foreign exchange and funds transfer out of the country.

Due to this, the International Air Transport Association (IATA) estimates that no less than $600 million belonging to foreign airlines was stranded in Nigeria.