Friday, June 24, 2022
MARKET UPDATE
Advertisement

TheCable

Nigeria withholds repatriation of $450m foreign airlines’ revenue, says IATA

Nigeria withholds repatriation of $450m foreign airlines’ revenue, says IATA
June 20
18:46 2022

The International Air Transport Association (IATA) says Nigeria is withholding about $450 million in revenue earned by foreign airlines operating in the country.

Kamil Al Awadhi, vice-president for Africa and the Middle East, IATA, said this on Sunday, at the opening of its 78th annual general meeting and world air transport summit in Doha, Qatar.

Al Awadhi said as of April, a total of $1.6 billion in funds are blocked by 20 countries worldwide.

He said $1 billion is tied up in 12 African countries, accounting for 67 percent of the total funds.

Advertisement

“Zooming in a little more, Nigeria alone is holding back $450 million. It is the most amount blocked by any single African country, and the amount is rising every week,” Al Awadhi said.

“Cash flow is key for airlines’ business sustainability — when airlines are unable to repatriate their funds, it severely impedes their operations and limits the number of markets they can serve.

“The consequences of reduced air connectivity include the erosion of that country’s competitiveness, diminished investor confidence, and reputational harm caused by a perception that it is a high-risk place to do business.

Advertisement

“Strong connectivity is an economic enabler and generates considerable economic and social benefits.

“We call on governments to prioritise aviation in the access to foreign exchange on the basis that air connectivity is a vital key economic catalyst for the country.

Al Awadhi, a former chief executive of Kuwait Airways, said Nigerian officials had blamed foreign currency shortage for not repatriating the airline revenue.

Al Awadhi said talks with Nigerian officials to release the funds have been a “hectic ride”.

Advertisement

“We keep chipping away and hoping that it clicks that this is going to damage the country down the road,” he said.

So far, IATA has held two rounds of talks with Nigerian officials, including from the Central Bank, who Al Awadhi said was “not responsive” to releasing cash.

Another round of talks between IATA and Nigerian officials is expected to start soon, the airline association said.

It, however, did not specify when.

Advertisement

“Hopefully, we can get some sort of solution where it starts going down (but) it won’t, I doubt, be paid in a single shot,” Al Awadhi said.

IATA added that Algeria, Ethiopia, Eritrea, and Zimbabwe withheld a total of $350 million from foreign airlines.

Advertisement
Tags

0 Comments

No Comments Yet!

There are no comments at the moment, do you want to add one?

Write a comment

Write a Comment