IATA urges Nigeria to release $464m of blocked airline money, as Emirates withdraws
The International Air Transport Association has called on the Nigerian government to prioritise the release of airline money blocked from repatriation.
Kamil Alawadhi, IATA’s Regional Vice President for Africa and the Middle East, following the decision by Dubai-based Emirates Airlines to suspend flights to Nigeria effective September 1, due to their inability to repatriate over US$90 million in revenue from the country, said immediate action is needed to avoid further suspensions by other airlines.
“IATA is disappointed that the amount of airline money blocked from repatriation by the Nigerian government grew to $464 million in July. This is airline money and its repatriation is protected by international agreements in which Nigeria participates. IATA’s many warnings that failure to restore timely repatriation will hurt Nigeria with reduced air connectivity are proving true with the withdrawal of Emirates from the market.
Airlines cannot be expected to fly if they cannot realise the revenue from ticket sales. Loss of air connectivity harms the local economy, hurts investor confidence, impacts jobs and peoples’ livelihoods. It’s time for the Government of Nigeria to prioritize the release of airline funds before more damage is done,” Alawadhi said.
Emirates on Thursday, August 18, said it will suspend all flights to Nigeria effective September 1, to limit further losses and impact on its operational costs that continue to accumulate.
“Emirates has taken the difficult decision to suspend all flights to and from Nigeria, effective 1 September 2022. Emirates has tried every avenue to address our ongoing challenges in repatriating funds from Nigeria, and we have made considerable efforts to initiate dialogue with the relevant authorities for their urgent intervention to help find a viable solution. Regrettably, there has been no progress,” Rula Tadros, Emirates’ Public Relations Manager said in a statement issued on Thursday.
The chronic problem of blocked funds in Africa
Blocked airline funds in some countries in Africa are hampering the smooth operations of various international airlines on the continent. It is also partly responsible for the high airfares in countries where funds are blocked.
IATA estimates that over US$1.6billion in airlines’ funds are blocked by 20 countries worldwide. Of this, 67 percent is in Africa. Some US$1billion is tied up in 12 African countries. Nigeria, Zimbabwe, Algeria, and Eritrea are the worst offenders.
Currently, Nigeria is holding on to US$464million of airlines’ funds, Zimbabwe over US$100million, Algeria- US$96million, and Eritrea-US79million.
Emirates Ghana lauds government for support in funds repatriation
Unlike in neighbouring Nigeria, Ghana has so far been a good place to do business for airlines, as they are able to repatriate their money as desired.
Country Manager of Emirates Airlines, Cathrine Wesley, during a recent interaction with the media in Ghana’s capital Accra, lauded the Government of Ghana for its continuous support in ensuring that airlines’ funds are readily available for operational and profit repatriation purposes.
“We have an excellent relationship with the Ghana Government. We have an excellent relationship with the Ministry of Transport, and the Ministry of Foreign Affairs [ in the movement of funds]. For Emirates Ghana, we are extremely fortunate to have the relationship that we have with the Ghana government and we don’t have any of those issues [blocked airline funds],” Cathrine Wesley said.
