Foreign Airlines’ Trapped Fund Hits $743.7m - IATA

The International Air Transport Association (IATA) has urged the federal government of Nigeria to ensure the release of funds owing international airlines for them. IATA through the minister of aviation, Hadi Sirika urged the federal government to take action to address Nigeria's issue of having the biggest amount of trapped funds in the world, which has increased from $662 million to $743 million. IATA encouraged Sirika to use his power and see that the backlog is cleared before the end of Muhammadu Buhari's administration. Some airlines have reduced their flight schedules while others are constantly emptying their inventories in order to reduce the impact of the backlog, resulting in job losses and detrimental effects on businesses.

A compliment presented to the Ministry of Aviation of the Federal Republic of Nigeria by IATA reads, "we would like to thank you for your continuous support for the growth of air transport in Nigeria and for the actualization of its role as a catalyst for the growth of the Nigerian economy.

"IATA and the global airline community would like to appeal for your special intervention in the resolution of the airlines blocked funds issue in Nigeria.

"For over a year, Nigeria has been the country with the highest amount of airline blocked funds in the world. Please find attached the comparative table of airlines’ blocked funds by country.

"Moreover, as of January 2023, airline blocked funds in Nigeria have increased to $743,721,092 from $662 million in January 2023 and $549 million in December 2022."

It said the blocked funds had, among other things, affected foreign direct investments (FDI).

 "The impact includes a strong message against FDI. The increasing backlog of international airlines’ blocked funds in Nigeria sends a strong message against foreign direct investment (FDI) in Nigeria.

"Potential investors are reading from the plight of the airlines that they would not be able to repatriate their funds from Nigeria, even at this moment when Nigeria is expecting investments in the concession of some of its prominent airports."

"With reduced connectivity to and from Nigeria and high ticket prices to mitigate the increasing backlog of their funds in Nigeria and its impact on their cash flow, some airlines have decided to reduce the number of their frequencies or the number of seats made available for sale in the Nigerian market."

The airlines trapped funds have led to a hike in ticket fares that is unbearable for many travelers. 

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