FG Begins Talks with Airlines over Trapped Funds

The Federal Government on Monday said it was working to fix the pending issues on the foreign exchange belonging to international airlines currently trapped in Nigeria.

Minister of Information and Culture, Lai Mohammed, disclosed this on Monday at the new terminal of the Murtala Muhammad International Airport, Lagos, while inspecting the facility.

Mohammed also said the newly completed Terminal Two of the Lagos airport had capacity to process 14 million passengers per annum.

The minister, his entourage and journalists were taken on a walk around the new airport airport terminal by the Managing Director of the Federal Airports Authority of Nigeria, Capt. Rabiu Yadudu.

Speaking on the concerns by foreign airlines operating in Nigeria, Mohammed said, “On the trapped funds, I can tell you that the relevant authorities are working hard on that issue.”

The minister also stated that the new international terminal was not built to replace MMIA’s terminal one, but to complement it.

He said, “That is why we were told that you could check in at one terminal and board at the other, so there is a handshake between the two terminals. It was the first terminal added to the original terminal since it was built some 30 years ago.

“The Terminal Two project started in 2013 and was completed by the present administration in 2022 under a bilateral agreement with the People’s Republic of China. No administration in the history of Nigeria has done this much, especially at a time of scarcity of resources.”

Mohammed also disclosed that over 10,000 direct and indirect job opportunities had been created in the new terminal.

He said the edifice, replicated in Abuja, Port-Harcourt, Enugu and Kano airports, was a testament to the achievements of the Federal Government in infrastructure development.

Speaking on the facilities and fittings in the terminal, the minister said, “I must confess it was an exhilarating experience comparable to what obtains anywhere in the world.

“On the air bridge ramp and the interface, one of the things the terminal manager told us is that not only is this airport in use but you can actually board your flights and check-in here. You can arrive in one terminal and pick your luggage in another terminal and this has taken care of the issue of interface between the two terminals.

 “I was here 40 years ago when the first terminal was inaugurated. There is a time between the inauguration of an airport and when the airport becomes operational. You know aviation is unforgiven of any mistake.”

He added, “So we need to test-run and be extremely certain that every equipment is working optimally. The beauty of it is that this airport has become operational. You can come in here and continue to various parts of the world. When the old airport was inaugurated, it took quite a while for it to become operational.

“The new international terminal is not to replace the old one but to complement it. It is gradually, and very soon this airport will be very busy. You can see that terminals are not used only by airlines. We have restaurant operators, banks, foreign exchange operators, etc and you have to screen people over and over again before it becomes operational.”

The new terminal has 60 check-in counters, seven passenger boarding bridges, five baggage claim belts, 16 departure desks and 28 arrival desks. It features eight security screening points, automated security control room with CCTV and eye-based lie detector machine.

Mohammed said the issue of maintenance up to the cleaning of the airport had been taken care of.

“At the beginning, some people said we should give the maintenance of the airport to local companies but I said what is important is safety and security,” he stated.

He added, “Gradually, when we give these maintenance to competent people who will also be oblige within a certain time to transfer technology to local companies. As at today, best operators in the world are taking care of the maintenance of this airport.”

Speaking on the attitude of investors in the aviation industry, the managing director of FAAN stated that most people did not  want to invest in the sector.

Yadudu said, “Investors don’t want to invest in aviation sector. Also, the issue on FAAN not respecting agreements is not true. An example is FAAN has millions of agreements across Nigeria over the years.

“We may have problem with one or two, so it will be very unfair to define FAAN by just one or two agreements. Secondly, I do agreements, there may be disagreements and when this happens, issues can be resolved professionally.

“If anyone has an issue with an agreement with FAAN and you have to go to the media, then go to the media with facts. Don’t go with a slogan. Resolution means you go to court and come to FAAN. If you have to go with the media, then go with the facts not the slogan.

Yadudu said media reports that FAAN increased landing and parking costs across Nigeria were wrong and misleading, as the authority had not increased these charges since 2002 for international operators.

“Domestic landing and parking fees were last reviewed by FAAN in 2012 when tickets were being sold for N6,000 and now they are being sold much more. There is more than enough reasons for FAAN to increase the fees but we have not,” he stated.

Meanwhile, Mohammed spoke on concerns about the hike in the price of aviation fuel, popularly called JetA1, and how it had impacted negatively on the sector in Nigeria and in other parts of the world.

He said, “The truth of the matter is that we do not refine JetA1 in Nigeria. This issue is global and not specific to Nigeria. However, certain local conditions in Nigeria have made it worse than some other countries.

“For international price, the dollar price for JetA1 increased and at the same time, the naira is devalued and this is the double trouble for Nigeria. This is why the fuel is very expensive. The cost of fuel has become 60 per cent of the Nigerian airlines’ cost of operations. So almost all revenue they make goes to buying JetA1.”

He added, “It is not easy to handle importation of JetA1. The trucks that will pick it up, move it across to different airports is quite an expensive venture and it requires highest level of handling to avoid contaminated fuel in the aircraft.

“We hope when refineries start producing JetA1, we know there will be availability.”

Mohammed also said the loan incurred to float the new terminal project was not the problem but the fact that it is wisely used for a good purpose.

He said, “It is not actually taking the money that is the problem but what we do with the money. When loans are used and invested in infrastructure such as this, then it means the loans are wisely used.

“The major problem is that the tax to GDP ratio is so low because most Nigerians don’t pay tax, so I want to appeal to Nigerians to help government in paying their taxes, then there will be reduction in deficit that we are experiencing.”

August 24, 2022