September 19, 2023

Int’l airlines blocked funds in Nigeria hit $783m

air fares

*As IATA pledges to support Nigeria
By Prince Okafor

International airlines blocked funds in Nigeria has risen to $783 million as of August 2023.

This is coming against the backdrop of interventions by the Federal Government to address the backlog of the funds belonging to foreign airlines.

Also, the international body representing over 300 airlines globally, covering 83 percent of global traffic stated that it would support the Federal Airport Authority of Nigeria, FAAN, with expertise to ensure international standards are met.

Meanwhile, the foreign airlines funds has been rising significantly in the past one year, thus forcing most airlines operating in Nigeria to cut down their frequencies.

The development has also forced the airlines to blocked Nigerian travellers from accessing lower inventories air tickets, making travellers to pay triple the charges per route.

Findings showed that foreign airlines collect Naira for their tickets to customers and exchange the same for foreign currencies for their operations.

But they have been lamenting their inability to get the exchange executed through the official foreign exchange market due to the scarcity of foreign exchange resources.

However, IATA’s Regional Vice-President for Africa and Middle East, Kamil Al Awadhi, shortly after a meeting with the Minister of Aviation and Aerospace Development, Festus Keyamo, called on the new government for continued, but closer, consultation with the industry while developing short- and long-term solutions for foreign exchange access to both domestic and foreign carriers.

He said: “As of August 2023, Nigeria accounts for $783 million of airline blocked funds.

“Safety, security, and efficient infrastructure are critical for a well-functioning air transport system. So is the ability of airlines to have access to the revenues they generate in Africa.

“These priorities are among the key elements addressed under IATA’s Focus Africa initiative to strengthen aviation’s contribution to Africa’s economic and social development. Nigeria’s focus on these issues reinforces their position among the leaders of African aviation.”

The global airlines body also promised to support the country’s aviation sector.

During a high-level meeting between IATA and FAAN, represented by the Managing Director, Mr. Kabir Mohammed, Awadhi, said: “We welcome FAAN’s commitment to upgrade Lagos airport. It is the main domestic and international hub connecting Nigeria with the rest of Africa and beyond and needs to keep up with demand.

“This strategic focus not only enhances the aviation sector but also serves as a catalyst for Nigeria’s broader economic and social advancement. IATA stands ready to support the FAAN with expertise to ensure international standards are met through the corrective action plan.”