IATA Appeals to FG on Airlines’ Blocked Funds

The International Air Transport Association (IATA) has appealed to the Federal Government of Nigeria on a resolution over airlines’ blocked funds. Dr Samson Fatokun, IATA Area Manager, West and Central Africa, made the appeal on Tuesday in Abuja, when he led a team to pay a courtesy visit to the Minister of Aviation, Sen. Hadi Sirika.

According to him, Nigeria has been the country with the highest amount of airline blocked funds in the world for over a year.

“We would like to thank you for your continuous support for the growth of air transport in Nigeria and for the actualisation of its role as a catalyst for the growth of the Nigerian economy.

“IATA and the global airline community will like to appeal for your special intervention for the resolution of airlines` blocked funds issue in Nigeria.

“ As of January 2023, airlines `blocked funds in Nigeria have increased to $743, 721,097 from $662m in January 2023 and $549m in December 2022, “ he said.

Fatokun said an increasing backlog of international airlines blocked funds in Nigeria had sent a message against Foreign Direct Investment (FDI) in Nigeria.

According to him, potential investors are reading from the plight of airlines that they may not be able to repatriate their funds from Nigeria, at a time when Nigeria is expecting more investments.

“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 the repatriation of the funds of the other party`s airline. Nigeria flouts this contractual obligation by not facilitating enough the repatriation of airlines’ funds, “he said.

He said some airlines had decided to reduce the number of their frequencies or seats made available for sale in the Nigerian market to mitigate the increasing backlog of their funds in Nigeria and its impact on their cash flow.

He stated that this reduced person and cargo access to Nigeria, and e-commerce that relied on aviation for speedy delivery would be impacted in the country.

“ Moreover, going by the law of demand and supply, the reduction of airline inventories in the Nigerian market will lead to ticket fare increase which would further burden average Nigerians and take air travel away from the reach of many Nigerians, “ he said.

Contributing, Mrs Susan Akporiaye, the National President of the National Association of Nigeria Travel Agencies (NANTA), also urged the minister to help facilitate the resolution of airlines’ blocked funds.

“The downstream sector of the aviation industry (Travel Agencies, Ground Handling Companies) rely heavily on airlines’ capacity to grow or remain in business.

“Should the airlines be compelled to further reduce their capacity, those businesses would be negatively impacted, leading to job loss.

“The negative indirect impact will also affect ground transportation (taxi, car hire), hotels and restaurants output, “she said.

Responding, the Minister of Aviation, Sen. Hadi Sirika, said he would use his office and personal relationship with President Muhammadu Buhari to ensure that airlines’ funds blocked in Nigeria were totally cleared.

He said efforts would be made to ensure clearance of the funds before the end of the current administration. Sirika, however, frowned at the reactions of some international airlines, regarding the blocked funds.

“We do know that we need your services as you also need our market. Things can be resolved by dialogues like this, which I think is better. “