A warning has been sent by International Air Transport Association. The Switzerland-based world airline body is concerned at the alarming speed at which blocked funds are rising which could harm airline connectivity in the Nigeria and other affected countries.
The International Air Transport Association (IATA) revealed the 47% increment in the block funds from 1.5 billion dollars in April 2022 to $2.27bon in April 2023.
The Director General for IATA, Willie Walsh quoted, “Airlines cannot continue to offer services in markets where they are unable to repatriate the revenues arising from their commercial activities in those markets. Governments need to work with industry to resolve this situation so airlines can continue to provide the connectivity that is vital to driving economic activity and job creation,”
Nigeria ($812.2m), Bangladesh ($214.1m), Algeria ($196.3m), Pakistan ($188.2m), and Lebanon ($141.2m) are the five countries that account for 68 percent of blocked funds-based data from the global airline body. The IATA has persuaded governments to honour international agreements and treaty obligations to allow airlines to repatriate these funds generated from activities such as ticket sales, cargo space, etc.
The Regional Vice President, Africa and Middle East, IATA, Kamil Alawadhi, said that the funds have risen to 812 million dollars as of April 2023 at the 79th Annual General Meeting and World Air Transport Summit in Istanbul on Sunday.
However, he hopes a meeting between the world airline body and the new Nigerian president Bola Tinubu’s administration can rekindle the process of repatriation of backlog funds again.
Mr. Alawadhi is optimistic that the meeting will yield the new president’s administration to process 50% of the funds instantly and establish a procedure for the other 50% to be paid within a couple of months.
The VP believes the situation of the blocked funds is part of why ticket prices are high in Nigeria and why there is a pessimistic narrative of the country to foreign investors which has caused a lack.
He complained about the fact that airlines have been affected badly by the pandemic and need their funds for the seamless running of their operations. As such he feels the sooner, they meet with the Nigerian government the faster they can get the blocked funds recovered.
Mr. Alawadhi concluded by saying that IATA wants to close the gap of the 2.1% of air transport Africa represents despite having 18% of the global population through the advancement of future skills, air connectivity, air safety, aviation infrastructure, and finance and distribution.
The IATA DG emphasized on governments to team up with the airlines to end the dilemma of unrepatriated funds as airlines cannot continue their commercial operations in these specific regions without being able to recover their earnings. The state of the airline affairs has to be resolved by the government so that airlines can continue their business of interconnectivity crucial for global employment and the global market economy.