IATA Urges Quick Intervention as Foreign Airlines Trapped Funds Rises to $743m
The International Air Transport Association, IATA has decried the continuous and drastic increase in the trapped funds of international airlines operating in Nigeria.
Investors King reports that in January 2023, the data had grown to $743,721,097 which is a 12.4 percent increment from the $662 million recorded in the corresponding period last year.
This was contained in a letter signed by the Area Manager of West and Central Africa, Dr. Samson Fatokun, on Tuesday which was addressed to the Minister of Aviation, Hadi Sirika.
In the letter, the association appealed to the Minister to urgently intervene and resolve the recurring matter of airlines’ blocked funds in the country.
Dr. Fatokun lamented that Nigeria has been marked as the country with the highest airline-blocked funds in the world amongst other countries for more than a year now.
According to him, foreign airlines trapped funds in the nation were $662m and $549m in January 2022 and December 2022 respectively but suddenly rose to $743m.
Enumerating the effects of the situation on the nation’s economy, Fatokun noted that foreign direct investment will be affected due to the massive backlog of funds.
He explained that the overlapping trapped funds contradict the Bilateral Air Service Agreement which should be looked into.
On arresting the unpleasant situation, Fatokun disclosed that the airlines have taken some actions like cutting down the number of seats put out for sale in the market in order to reduce the number of passengers and cargoes’ access to the country.
“Going by the law of demand and supply, the reduction of airline inventories in the Nigerian market will lead to the ticket fare increase, which will further burden average Nigerians,” he said.
However, the Minister of Aviation, Hadi Sirika held a meeting with the IATA team, foreign airlines and travel agents on Tuesday to address the matter.
He promised the international airlines of prompt action as the issue will be tabled before the presidency and the Central Bank of Nigeria, CBN for a solution.
The Stranded Traveller: A Tale of Trapped Funds and Soaring Airfares in Nigeria
Nkechi had been saving for months to take her dream trip to London. She had researched everything from flights to hotels, and had finally settled on a good deal with Virgin Atlantic. But just as she was about to make the payment, she noticed that the price had gone up significantly.
She couldn’t understand why the exchange rate had suddenly skyrocketed from N462 per dollar to N551 per dollar, as she had been keeping up with the news and hadn’t heard of any major changes in the forex market.
Nkechi soon found out that the increase was due to a recent move by foreign airlines to block their inventory of cheaper tickets in order to cushion the effects of the rising amount of trapped funds. Nigeria had the highest amount of foreign airlines’ trapped funds globally, with about $743m as of January that year. This had led to a backlog of unremitted funds which the airlines were unable to repatriate, resulting in the increase in the exchange rate for ticket sales.
Nkechi felt frustrated and helpless. She had saved diligently and now her dream trip seemed to be slipping away. She wondered why the government hadn’t done more to release the trapped funds and make things easier for travellers like her. She reached out to her travel agent, who explained that the increase in the exchange rate had led to an over 20 per cent increase in international airfares. This meant that the promo price for her Virgin Atlantic ticket had gone up from N800,000 to N1.1m.
Nkechi was devastated. She had to either pay the higher price or forfeit her trip. She decided to explore other options and eventually found a cheaper deal with a less popular airline. The trip wasn’t exactly what she had envisioned, but at least she was going to London.
As she boarded the plane, Nkechi couldn’t help but think about how the situation could have been different if the government had acted faster to resolve the issue of trapped funds. She knew that many travellers were still stranded and unable to afford the high airfares. She made a mental note to write to her representatives and urge them to take action.
Nkechi’s trip was filled with mixed emotions. She was grateful for the opportunity to travel, but also saddened by the knowledge that many others were unable to do the same. She hoped that the situation would improve soon, and that travellers like her would not have to suffer the consequences of bureaucratic delays and economic uncertainty.
FG Assures Kick-off of Nigeria Air Operations Before Buhari’s Administration Ends
The Federal Government has reiterated its readiness to commence the operation of the national carrier, Nigeria Air before the expiration of President Muhammadu Buhari’s tenure.
The Minister of Aviation, Hadi Sirika gave the assurance during the 2023 National Aviation Stakeholders Forum in Abuja.
Investors King recalls that in November 2022, a Federal High Court in Lagos issued an order of interim injunction directing the federal government to discontinue the establishment of the national carrier. However, in February, Sirika said in an interview that he was not aware of such a court injunction, noting that the Nigerian Air had come to stay
Sirika stated that efforts have been intensified and consultations made to deliver the national carrier for use before May 29, 2023.
He said, “Operation of local and international flights will commence soon. Before the end of this administration, before May 29, we will fly.
“Negotiation meetings with the Ethiopian Airlines Group Consortium and the Federal Government of Nigeria is ongoing. Next step: Federal Executive Council approval of the Full Business Case.”
The minister noted that the Nigeria Air will reduce capital flights and improve the nation’s aviation industry.
According to him, the national carrier will also increase the Gross Domestic Product (GDP) of the industry. The impact would also be felt in tourism, agriculture and economic sectors as it will expand its shores, aid smooth transportation and provide more jobs.
Speaking on the development so far, Sirika said that the federal government had begun transactions to foreign airlines’ whose ticket sales funds were held up by insufficient dollars.
He said Qatar Airlines had $201 million trapped while for IATA airlines, $216 million was held.
He however, assured that efforts are ongoing to get the money released, adding that some of Emirates Airline funds have been returned and now left with $35 million.
Estonia Offers Easiest Work Visa to Europe Amidst Low Applications
Estonia, a digital nation in northern Europe, has been ranked as the easiest European Country where a work visa can be obtained.
Investors King reports that application for the work visa can be done through the official ‘Work in Estonia website’ for a one year work visa with an option of renewal.
Estonia is rated the easiest country amongst other European countries to obtain a work visa because it accepts such visas massively. Though, its visa applications received are quite low when compared to others.
The work visa application fee is pegged at €100 while it is processed and made available in 30 days.
The visa package consists of visitation to other Schengen countries for not more than three months within 180 days, and a residency permit can be obtained after two months.
On the ‘Work in Estonia website’, new job opportunities in the countries are posted daily awaiting applications.
To apply for the work visa, here are the criteria:
- Be qualified physically and mentally for the job and receive a legitimate employment agreement. Thereafter your employer must register you with the Estonian Police and Border Guard Board.
- Provide all the requirements for an Estonian work visa such as a current passport, two passport-size photos, and an application form.
- Fill out the application form online. Select the long-stay D visa option, and make sure you fully complete it with all the correct information after which you print a hard copy and sign it at the end.
- You must pay for your visa application after completing the application form. When you present the documents at the consulate or embassy, you can make payment.
- With other requested documents, affix the payment receipt.
- A certificate of your legal health insurance. Your health insurance must have a coverage limit and be valid throughout the entire Schengen region. You will be covered by Estonian health insurance once you enter the country.
- Documents demonstrating that you have a place to stay while visiting Estonia, which should: Proof of lodging, lease or contract, an invitation letter, etc.
- A cover letter introducing the sender to the embassy.
- A criminal record. This document must be released by the police authorities in your home country and must demonstrate that you have a clean criminal record.
- Work agreement. The work contract must specify the nature of the work you will be performing in Estonia. It must include your salary, work hours, and so on. This document demonstrates that you have a job waiting for you in Estonia.
- Documents proving personal qualification. These documents demonstrate that you are qualified for the position for which you have applied. They should be a certificate of your educational level, CV, driving license (if applicable), etc.
- Registering employment in Estonia. Your employer must register your short-term employment in Estonia. This document allows you to work in Estonia until you receive your residence permit. For your employer to apply for your short-term employment, you must give them a copy of your passport, photo, and other required personal details. After that, you will receive an ID code, an 11-digit number used to identify your details in Estonia.
For an extension of the work visa to stay longer than the initial one-year plan, an application for a temporary residence permit is required after settling in the country which could run for up to five years and is still renewable. The renewal application must be done at least three working days before the visa expires. Also, the application must be submitted personally at any of the Police and Border Guard Board offices in Estonia.
Family members are welcomed on an Estonian work visa and they will be allowed to work, study and stay in the country. Family members are identified as spouse (partner), cohabiting partner, child (under the age of 18), and older relatives (if they are older than age 65) with health problems.
Here are other major highlights on working in Estonia:
- There is no such thing in Estonia as a special “work permit”. You can work there if your employer has registered your short-term employment and your stay is legal (e.g., you have a D-visa) or if you have a valid (temporary) residence permit for working.
- In Estonia, the average monthly wage is €1,150. The amount you earn each month depends on the job.
- Asides from rent, the average monthly expense in Estonia for a single person is (€661). You might have to pay as much as €188 per month for premium health insurance, depending on the type of insurer you select.
- You must initially apply for a temporary residence permit (for work up to 5 years with your first permit).
- You can apply for a long-term residence permit once you have been a temporary resident of Estonia for five years.
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