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Nigeria Tops List Of 27 Countries With $2 Billion Trapped Airlines’ Funds Globally

Nigeria Tops List Of 27 Countries With $2 Billion Trapped Airlines’ Funds Globally
December 8, 2022

Nigeria has $551 million, Pakistan has $225 million, Bangladesh has $208 million, Lebanon has $144 million, and Algeria has $140 million.

 

Trapped funds belonging to foreign airlines have risen by more than 25 per cent ($394 million) in the last six months, according to The International Air Transport Association (IATA).

 

IATA disclosed this in a report released on Tuesday, mentioning Nigeria, Pakistan, Bangladesh, Lebanon, and Algeria as the contributors of these trapped funds.

 

Nigeria has $551 million, Pakistan has $225 million, Bangladesh has $208 million, Lebanon has $144 million, and Algeria has $140 million.

 

The report reads: “The International Air Transport Association (IATA) warned that the amount of airline funds for repatriation being blocked by governments has risen by more than 25% ($394 million) in the last six months.

 

“Total funds blocked now tally at close to $2.0 billion. IATA calls on governments to remove all barriers to airlines repatriating their revenues from ticket sales and other activities, in line with international agreements and treaty obligations.

 

“IATA is also renewing its calls on Venezuela to settle the $3.8 billion of airline funds that have been blocked from repatriation since 2016 when the last authorization for limited repatriation of funds was allowed by the Venezuelan government.

 

“Preventing airlines from repatriating funds may appear to be an easy way to shore up depleted treasuries, but ultimately the local economy will pay a high price. No business can sustain providing service if they cannot get paid and this is no different for airlines.”

 

“Air links are a vital economic catalyst. Enabling the efficient repatriation of revenues is a critical for any economy to remain globally connected to markets and supply chains,” said Willie Walsh, IATA’s Director General.

 

“Airline funds are being blocked from repatriation in more than 27 countries and territories,” the report added.

 

The total amount of airline funds barred from repatriation in Nigeria is $551 million. In March 2020, demand for foreign currency in the country outpaced supply, and the country's banks were unable to service currency repatriations.

 

Despite these challenges, Nigerian authorities have engaged with the airlines and are working with the industry to find ways to release the funds.

 

The organisation also requested that Venezuela pay the $3.8 billion in airline funds that have been frozen since 2016 when the Venezuelan government granted the last authorization for limited repatriation of funds.

 

The report continued: “Airlines have also restarted efforts to recover the $3.8 billion of unrepatriated airline revenues in Venezuela. There have been no approvals of repatriation of these airline funds since early 2016 and connectivity to Venezuela has dwindled to a handful of airlines selling tickets primarily outside the country. In fact, between 2016 and 2019 (the last normal year before COVID-19) connectivity to/from Venezuela plummeted by 62%. Venezuela is now looking to bolster tourism as part of its COVID-19 economic recovery plan and is seeking airlines to restart or expand air services to/from Venezuela. Success will be much more likely if Venezuela is able to instill confidence in the market by expeditiously settling past debts and providing concrete assurances that airlines will not face any blockages to future repatriation of funds.”