Delta Air Lines charges Nigerians in USD amid rising funds trapped

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Since funds made by foreign airlines through air ticket sales continue to be trapped in Nigeria, Naijaonpoint can confirm that at least one of the international airlines (delta airlines) has begun selling tickets to passengers in US dollars.

Our correspondent deduced that this was to prevent the continued growth of his funds trapped in the country. According to the International Air Transport Association (IATA), funds trapped from foreign airlines in Nigeria have risen to $550 million as of November 30, 2022.

Meanwhile, the Nigerian Civil Aviation Authority (NCAA) has continued to frown on the sale of foreign currency air tickets to Nigerian travelers, saying the practice contravenes the country’s policy on air travel.

More about development: Naijaonpoint has learned that Delta Air Lines, the only US airline that flies to Nigeria from its base in Atlanta, Georgia, now sells air tickets in dollars to passengers. This was confirmed in our correspondence by Mr. Jummy Echelgruen, the airline’s Director of Sales for Africa, the Middle East and India.

However, Echelgruen insisted that the airline did not break any known laws or policies in Nigeria, noting that it was part of the US-Nigeria Bilateral Air Service Agreement (BASA) arrangements.

Although our correspondent was unable to verify whether any other airlines besides Delta sell air tickets in dollars, it was learned that the US carrier had been selling dollar tickets to air travelers in the past six months.

Why does this happen: Echelgrue explained that the airline adopted the tactics to prevent more funds from being trapped in Nigeria, which he said was “enough to worry Delta Air Lines.”

According to him, the BASA agreement that the US government signed with Nigeria allowed it to sell air tickets in dollars or naira, and stressed that the airline had not violated any known laws in Nigeria.

He stressed that Delta Air Lines was not contemplating suspending flight services out of Nigeria due to trapped ticketing funds, noting that the airline was committed to servicing Nigerian routes. He said:

  • “What we’ve done is now we’re connecting through dollar ticketing because that’s the way we can continue our service without interruption. We are allowed to do that with the bilateral agreement between the US government and the Nigerian government and we are providing adequate availability for passengers from Nigeria to all over the world.
  • “With this we have opened more inventories allowing passengers to travel with us, but they have to pay in dollars. We will continue to operate as normal and our load on our flight continues to be very good.
  • “There is no gray area and it is part of our agreement. The agreement says that we can charge in naira or US dollars. Now we sell our seats in dollars and that will be the case until we can solve this crisis”.

However, he was silent on the specific amount of funds Delta Air Lines seized in Nigeria.

Details about trapped funds: A source close to one of the affected airlines, who did not want to be named, confided in our correspondence over the weekend that the trapped funds from Ethiopian Airlines, Emirates and British Airways exceeded $300 million.

The source claimed that starting in November, the Federal Government through the Central Bank of Nigeria (CBN) promised that the funds would be paid out in December. But at the time of writing this report, none of the airlines had received the payment guarantee despite IATA’s repeated intervention.

Interestingly, Nigeria’s neighbor Ghana has repatriated all foreign airline funds previously stuck within its borders. Our source said:

  • “The government said it would pay the airlines in December, but when in December we don’t know. Each airline has different funds trapped here in Nigeria. It is IATA that is talking with the Ministries of Finance and Aviation.
  • “The smallest of the airline’s trapped funds is $12 million; Emirates has more than $100 million and that was the reason they pulled out. Also, Ethiopian Airlines and British Airways are in that range of $100 million each because they are doing the same volume. One of the airlines with the smallest flights to Nigeria received only $1.3 million last time CBN made some payments, which is very small.
  • “Because you are flying, your debts continue to accumulate. We need dollars to pay for our equipment. So, it’s not easy for the airlines. 80 percent of the cost of operating the flights to Nigeria is borne by the headquarters. The income is not from here. I just hope this gets resolved soon or else most airlines would leave this country.”

… Delta Air Lines charges Nigerians in USD amid rising funds trapped Read more in … Naijaonpoint.

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