Nigeria on $812m tops foreign airlines’ blocked funds now $2.27b
By Jeph Ajobaju, Chief Copy Editor
Nigeria is top among countries which together block the repatriation of 68 per cent of funds owned by foreign airlines worldwide, the International Air Transport Association (IATA) has disclosed.
IATA said blocked funds worldwide rose 47 per cent from $1.55 billion in April 2022 to $2.27 billion in April 2023, warning this poses difficulty to airline connectivity in the affected markets.
__________________________________________________________________
Related articles:
Domestic airfares up nearly 100% in 12 months
FAAN says it can’t operate airports 24/7 for now
Restricted operations cost local airlines N4b yearly
__________________________________________________________________
Airlines threaten pull out from debtor countries
“Airlines cannot continue to offer services in markets where they are unable to repatriate the revenues arising from their commercial activities in those markets,” IATA Director General Willie Walsh said in a statement, per Vanguard.
He urged governments to work with industry to resolve this situation so airlines can continue to provide connectivity vital to driving economic activity and job creation.
The air transport association listed the countries with the highest debts as Nigeria ($812.2 million), Bangladesh ($214.1 million), Algeria ($196.3 million), Pakistan ($188.2 million), and Lebanon ($141.2 million).
Walsh also implored governments to abide by international agreements and treaty obligations to enable airlines repatriate funds from ticket sales, cargo space, and other activities.
High costs and low traffic brace African airlines for $3.5b loss
It emerged in January 2023 that a $3.5 billion revenue loss in full year 2022 (FY 2022) was estimated for airlines in Nigeria and other countries on the continent by the African Airlines Association (AFRAA).
This is equivalent to 20 per cent of the loss in FY 2019, AFRAA said in its latest African airlines’ performance updates, which approximated an $800 million revenue loss in the fourth quarter of 2022 (Q4 2022).
AFRAA said:
- November 2022 traffic reached 85.7 per cent and airline capacity 84.2 per cent of 2019 levels.
- Domestic market share notched 34.3 per cent capacity and passengers carried 34.3 per cent
- Intra-Africa passengers carried was 30.9 per cent and capacity 24.8 per cent.
- Intercontinental in November was 34.2 per cent and capacity 34.8 per cent.
- African airlines’ operations on international routes exceeded 2019 pre-pandemic levels by 2.28 per cent.
- Seven African airlines exceeded the number of international routes they operated pre-pandemic.
Aviation fuel price, pandemic impact
AFRAA lamented the price of aviation fuel (Jet A1) continued the upward trend in November 2022, with the year-to-date global average price at $141.5 per barrel.
The impact on global airlines’ fuel bill was estimated at $130.8 billion for FY 2022.
AFRAA said the number of coronavirus cases was once again on the rise in China, though the Zero Covid Strategy was in force in that country.
It reiterated infections remained low in Africa despite the low vaccination rate of 24.6 per cent compared with the global average of 68.5 per cent
“Worldwide, the number of cases has reached 630 million and 12.6 million in Africa. The recovery rate is 99.98 per cent worldwide compared to 98.01 per cent in Africa,” AFRAA added.
“The government of Uganda has extended the lockdown in the Ebola hotspots of Mubende and Kassanda by 21 more days. 55 confirmed deaths have been reported since the outbreak. So far, no travel advisories on the outbreak.
“Airlines are however advised to exercise caution and report any passengers showing signs of the Ebola virus to the health authorities for further investigations.”
