Keeping airlines afloat

• Published date: 17 January 2023
• Publication title: Nigeria - The Nation

Agitation is on the rise by organisations in the global air travel space over the refusal of 27 countries and territories to repatriate over $2 billion of trapped/blocked funds from ticket/cargo sales by global airlines. African countries, including Nigeria, Zimbabwe, and Algeria, are leading the pack with huge funds belonging to foreign carriers trapped in their jurisdictions. Experts say urgent steps need to be taken to prevent escalation of the crisis as it is impeding the operations of affected carriers by limiting the number of markets they could serve. KELVIN OSA-OKUNBOR reports

GLOBAL air transportation is facing fresh challenges as it struggles to exit shocks triggered by the COVID-19 pandemic.

As more countries remove barriers to air travel via COVID-19 health and aeronautical protocols, air travel is gradually rebounding forcing airlines to evolve flight expansion strategies.

The Airports Council International (ACI), world's published assessment of the impact of the COVID-19 pandemic on airports, indicates that global domestic passenger traffic, will reach its 2019 level in late 2023.

According to ACI's research, potential for a recession approaching 2023 may also represent an additional obstacle for the sector.

But, global airlines are navigating new curves to keep their operations afloat.They are grappling with release of blocked funds accruing from ticket sales in some 27 countries.

Airline funds are being blocked from repatriation in more than 27 countries and territories. As at last December, top five markets with blocked funds include Nigeria: $551 million, Pakistan $225 million, Bangladesh $208 million, Lebanon $144 million, and Algeria $140 million.

The world's trade body for airlines, the International Air Transport Association (IATA), said about $2 billion of its members' assets are trapped in more than 27 countries and territories around the world.

IATA warned that the amount of airline funds for repatriation being blocked by governments had risen by more than 25 per cent, about $394 million in the last few months.

The global body has called on governments to remove barriers to airlines repatriating their revenue 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 authorisation 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...