Once again, Nigeria tops the list of countries blocking funds that effectively prevent airlines from gaining access to these much-needed monies.
The International Air Transport Association (IATA) at the start of its AGM in Istanbul, Turkey has warned that these rapidly rising levels of blocked funds are a threat to airline connectivity in the affected markets.
In total, the industry’s blocked funds increased by 47% to (US) $2.27 billion in April 2023 from (US) $1.55 billion in April 2022.
“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,” said Willie Walsh, IATA director general.
The top five countries account for 68.0% of blocked funds. These comprise:
- Nigeria (US) $812.2 million
- Bangladesh (US) $214.1 million
- Algeria (US) $196.3 million
- Pakistan (US) $188.2 million
- Lebanon (US) $141.2 million
Last year Dubai based carrier Emirates threatened to withdraw its services from the country and the government responded by releasing (US) $265 million. Many international airlines fly into Nigeria under the legal framework of the Bilateral Air Service Agreements (BASA), signed between their countries and the Federal Republic of Nigeria.
IATA urged governments to abide by international agreements and treaty obligations to enable airlines to repatriate these funds arising from the sale of tickets, cargo space, and other activities.