…blocked funds drop to $1.7bn
- NCAA vows to sanction carriers over refund
The International Air Transport Association (IATA) has removed Nigeria from the list of countries blocking airlines’ funds. IATA also stated that nine countries account for 83 per cent of the airline industry’s blocked funds, which would to $1.43 billion. In June, IATA confirmed that the Central Bank of Nigeria, (CBN), cleared foreign airlines trapped funds worth $831 million.
But while disclosing that Pakistan, XAF Zone, Bangladesh, Algeria, Lebanon Mozambique, Angola, Eritrea and XOF Zone were some of the countries still blocking $1.7 billion in airline funds, IATA reported that $1.7 billion were blocked from repatriation by governments as of the end of October 2024. According to the association, this was a small improvement compared to the $1.8 billion reported at the end of April.
Commenting on the development, the Director General of IATA, Willie Walsh, said over the last six months, the association has seen significant reductions in blocked funds in Pakistan, Bangladesh, Algeria and Ethiopia.
He said: “At the same time, amounts are rising in the XAF /XOF zones and Mozambique. Bolivia has also emerged as a problem, where repatriating sales revenues is becoming increasingly difficult and unsustainable for airlines.
This unfortunate game of ‘whack-a-mole’ is unacceptable. Governments must remove all barriers for airlines to repatriate their revenues from ticket sales and other activities by international agreements and treaty obligations.”
“No country wants to which drives economic prosperity. But if airlines cannot repatriate their revenues, they cannot be expected to provide a service. Economies will suffer if connectivity collapses. So, it is in everyone’s interest, including governments, to ensure that airlines can repatriate their funds smoothly.”
IATA had in June during its Annual General Meeting in Dubai in August 2024 stated that Nigeria had paid 98 per cent of airlines trapped funds in the country and called for the final clearance of the remaining 2 per cent.
Walsh said there is an overall 28 per cent decrease in the amount of airline funds blocked from repatriation by governments. He put the total blocked funds at the end of April 2024 at approximately $1.8 billion, a reduction of $708 million (28 per cent) since December 2023.
Walsh acknowledged the tremendous progress in Nigeria, recalling that at its peak in June 2023, Nigeria’s blocked funds amounted to $850 million, significantly affecting airline operations and finances in the country, but most of the funds had been repatriated by the airlines from Nigeria.
According to him, carriers faced difficulties in repatriating revenues in US dollars, and the high volume of blocked funds led some airlines to reduce their operations and one carrier to temporarily cease operations in Nigeria, which severely impacted the country’s aviation industry.
Meanwhile, piqued by the deluge against airlines that have frustrated travellers over inability to make a refund for cancelled or delayed flights that span more than five hours, the Nigerian Civil Aviation Authority (NCAA) is ready to wield the big stick by sanctioning erring airlines.
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