Nigeria’s Federal Government has made significant progress in settling the funds of international airlines, with a whopping 98% of the trapped monies now cleared, according to the International Air Transport Association (IATA). Only $19 million remains outstanding from the initial $850 million.
The settlement process has hit a minor roadblock, as the remaining amount is now contingent on the completion of a thorough verification exercise by the Central Bank of Nigeria (CBN). Commercial banks’ claims are currently under review, causing a temporary delay.
Reiterating the call for governments to remove all impediments to airlines repatriating their revenues from ticket sales, IATA’s Director General, Willie Walsh, said: “We commend the new Nigerian government and the CBN for their efforts to resolve this issue. Individual Nigerians and the economy will all benefit from reliable air connectivity for which access to revenues is critical.
“We are on the right path and urge the government to clear the residual $19 million and continue prioritising aviation.”
In a promising development, the international airline industry has seen a substantial 28% decrease in funds blocked by governments. The total amount has dropped to $1.8 billion, a significant reduction of $708 million since December 2023, indicating a shift towards greater financial freedom.
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Walsh acknowledges the progress made in reducing blocked funds, but stresses that the remaining $1.8 billion is a formidable obstacle that demands immediate attention and action.
His words: “The reduction in blocked funds is a positive development. The remaining $1.8 billion, however, is significant and must be urgently addressed.
The repatriation of airline revenue has been fast-tracked, providing a significant shot in the arm for the industry. With profitability already a significant challenge, this move ensures that carriers can continue to provide essential connectivity services without cash flow constraints.
“The efficient repatriation of airline revenues is guaranteed in bilateral agreements. Even more importantly, it is a pre-requisite for airlines—who operate on thin margins—to be able to provide economically critical connectivity. No business can operate long-term without access to rightfully earned revenues.