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IATA reveals foreign airlines’ blocked funds in Nigeria totaled $743m.
The International Air Transport Association (IATA) has disclosed that the amount of foreign airline revenue the Nigerian government is preventing from being repatriated has climbed from $662 million in January 2023 to $743 million today.
Samson Fatokun, the IATA regional manager for West and Central Africa, wrote a letter on Tuesday to Hadi Sirika, the minister of aviation, informing him of this.
In the letter to the federal government, the air transport association and the international airline community asked for an unique solution to the problem of blocked airline cash in the nation.
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“For over a year, Nigeria has been the country with the highest amount of airline-blocked funds in the world. Please find attached the comparative table of airlines’ blocked funds by country,” the letter reads.
“Moreover, as of January 2023, airlines’ blocked funds in Nigeria have increased to $743,721,092 from $662m in January 2023 and $549m in December 2022.”
As the sum climbed from $450 million in May 2022 to $464 million in July of that same year, the trapped monies have been associated with a number of issues that have had a significant impact on Nigeria’s aviation industry.
In attempts to recover its revenue last year, Emirates Airlines discontinued flying operations to Nigeria, but eventually restarted passenger scheduled flights in December 2022.
Similar action was taken by British Airways (BA), which stopped local travel agencies from accepting reservations through their portals by closing inventory on Nigeria in the global distribution system (GDS).
The Central Bank of Nigeria (CBN) issued $265 million to foreign airlines operating in the nation to settle unpaid ticket sales after repeated meetings by the authorities to resolve the impasse.
But the problem is yet to be fully resolved.
Susan Akporiaye, national president, of the National Association of Nigeria Travel Agencies (NANTA) asked the federal government to proffer solutions to the challenges of airfare profiteering in the aviation sector.
She said the face-off with foreign airlines has affected travel agents’ businesses in several ways as the airlines blame the hike in airfare on their trapped funds.
Speaking in the letter on Tuesday, IATA said the increasing backlog of international airlines’ blocked funds in Nigeria sends a strong message against foreign direct investment (FDI) in Nigeria.
“Potential investors are reading from the plight of the airlines that they would not be able to repatriate their funds from Nigeria, even at this moment when Nigeria is expecting investments in the concession of some of its prominent airports,” the group said.
“Foreign airlines fly into Nigeria within the legal framework of the bilateral air service agreement (BASA) signed between their countries and the Federal Republic of Nigeria. It is agreed in those BASAs that Nigeria will facilitate repatriation of the funds of the other party’s airline. Nigeria flaunts this contractual obligation by not facilitating enough the repatriation of airlines’ funds.”