Return $600m to foreign airlines, IATA orders Nigeria | Independent Newspapers Limited
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Return $600m to foreign airlines, IATA orders Nigeria

Posted: Jun 3, 2016 at 5:01 am   /   by   /   comments (0)

THE International Air Transport Association (IATA) has called on the Federal Government to respect international agreements requiring nations to ensure foreign airlines are able to repatriate their revenues out of the countries they are operating in. IATA which monitors blocked funds globally, currently in excess of $5 billion listed top two countries blocking the repatriation of airline funds as Venezuela and Nigeria. In Nigeria, IATA said the total airline funds blocked from being repatriated is nearing $600 million.

“Air connectivity is vital to all economies. The airline industry is a competitive business operating on thin margins,” said Tony Tyler, IATA’s Director General and CEO.

“In Nigeria, repatriation issues arose in the second half of 2015 when demand for foreign currency in the country outpaced supply and the country’s banks were not able to service currency repatriations.

“So the efficient repatriation of revenues is critical for airlines to be able to play their role as catalysts for economic activity. It is not reasonable to expect airlines to invest and operate in nations where they cannot efficiently collect payment for their services,” he added.

The Federal Government, however, is currently engaging the airlines and the aviation industry, seeking possible measures to make the funds available to the airlines. Already, Spanish and American carriers, Iberia and United Airlines have announced they are pulling out of Nigeria following their inability to repatriate earnings made in the country back home. Last week, it was rumoured that British Airways was also tinkering with the idea of suspending its services to Nigeria but the airline, however, came out to debunk the rumours. Meanwhile, the National Union of Air Transport Employees (NUATE) has urged the government to step up effort in ensuring that foreign airlines get their monies out of Nigeria to meet investments and other logistics commitments back home.

According to the union, about 2,000 direct and indirect jobs could be lost in the industry if more of the major airlines flying into the country are forced to shut down their operations due to the country’s huge indebtedness to them.

“Blocked funds are a problem in a diverse group of countries, some of which are undergoing significant economic challenges particularly with a fall-off in oil revenues,” said Tyler, the IATA boss. He said there are five countries (Nigeria and Venezuela, Sudan, Egypt and Angola) that are currently hindering airlines’ repatriation of incomes.

“One thing all five nations have in common is the urgent need for robust air connectivity that is being hampered by airlines’ difficulty in repatriating funds,” said Tyler.