At $812m, Nigeria Owes 36% of Global Airlines’ Blocked Funds

The growing trend of trapped revenues of foreign airlines operating in various countries around the world has remained unabated, according to the latest disclosure by the International Air Transport Association (IATA).

In the last 12 months, spanning April 2022 to April 2023, the industry’s blocked funds have increased by 47% to $2.27 billion from $1.55 billion.

In an updated note released on Sunday on the subject, IATA pointed out that 68.28% of the blocked funds are trapped in some five countries namely, Nigeria, Bangladesh, Algeria, Pakistan and Lebanon.

In the five countries, repatriation of $1.522 billion belonging to international carriers airlines are being blocked.

Highest revenue trapped in Nigeria

A cursory look at the data showed that Nigeria is leading others with $812.2 million trapped funds. This represents 35.77% of the global figure and 52.33% of the cumulative amount in the top five countries with highest blocked funds.

Findings also show that unremitted revenue of foreign airlines in Nigeria has worsened as both the amount and percentage share relative to the global figure have degenerated.

Specifically, a year ago when global blocked fund stood at $1.55 billion as at April 2022, Nigeria was responsible for just $450 million, representing 25 per cent of the total amount of unrepatriated international carriers’ funds.

Compared to the latest data of April 2023, the figure has increased by $362 million or 80%, while the country’s share of global blocked fund further degenerated from 25% in April 2022 to 36% this year.

Meanwhile, other countries in the top five category are Bangladesh, blocking $214.1 million (13.8%), Algeria with $196.3 million blocked funds or 12.65% while Pakistan ($188.2 million) and Lebanon ($141.2 million) followed suit representing 12.13% and 9.1% respectively of the total sums of $1.552 billion trapped in the top five countries.

A threat to airline connectivity

IATA warned that rapidly rising levels of blocked funds are a threat to airline connectivity in the affected markets.

“Airlines cannot continue to offer services in markets where they are unable to repatriate the revenues arising from their commercial activities in those markets.

“Governments need to work with industry to resolve this situation so airlines can continue to provide the connectivity that is vital to driving economic activity and job creation,” said Willie Walsh, IATA’s Director General.

IATA urged governments to abide by international agreements and treaty obligations to enable airlines to repatriate these funds arising from the sale of tickets, cargo space, and other activities.

Source: AITA