Africa is no longer the continent holding the greatest amount of airline funds blocked from repatriation by governments, the International Air Transport Association (IATA) has reported, at its AGM, in Dubai. (IATA is the global representative body for the airline industry.)

This is the result of rapid progress by Nigeria in releasing previously blocked funds, augmented by a parallel process in Egypt. In June last year, Nigeria was holding $850-million in blocked airline funds. As of April, this year, 98% of this amount had been released, leaving only $19-million blocked. This remaining amount is still being held while the Nigerian Central Bank continues its verification process on outstanding forward claims by commercial banks.

“We commend the new Nigerian government and the Central Bank of Nigeria for their efforts to resolve this issue,” highlighted IATA director-general Willie Walsh. “Individual Nigerians and the economy will all benefit from reliable air connectivity for which access to revenues is critical. We are on the right path and urge the government to clear the residual $19-million and continue prioritising aviation.”

The actions of Nigeria and Egypt have cut the global total of blocked airline funds by $708-million, or 28%, since December. The remaining blocked funds amounted to $1.8-billion.

“The reduction in blocked funds is a positive development,” he stated. “The remaining $1.8-billion, however, is significant and must be urgently addressed. The efficient repatriation of airline revenues is guaranteed in bilateral agreements. Even more importantly, it is a pre-requisite for airlines – who operate on thin margins – to be able to provide economically critical connectivity. No business can operate long-term without access to rightfully earned revenues.”

Of the remaining blocked funds, 87% are being held by just eight countries. Five of these are still in Africa, but together they accounted for $730-million of the total still blocked, with $860-million being held by just three Asian countries. The largest African holder of blocked funds is Algeria, with $286-million, in third place globally, followed by countries in the Central African Franc zone, with a collective total of $151-million in blocked funds (globally, fourth), then Ethiopia ($149-million, globally fifth), Eritrea ($75-million, globally seventh) and Zimbabwe ($69-million, globally eighth).

The two biggest blockers of airline fund repatriation are now Pakistan, with $411-million held back, and Bangladesh, with $320-million. (Lebanon, holding on to $129-million in airline funds, is the third Asian country, and sixth globally, on the list.)

“Pakistan and Bangladesh must release the $731-million in blocked funds immediately to ensure airlines can continue providing essential air connectivity,” asserted Walsh. “In Bangladesh, the solution is in the hands of the Central Bank, which must prioritise aviation’s access to foreign exchange in line with international treaty obligations. The solution in Pakistan is finding efficient alternatives to the system of audit and tax exemption certificates, which cause long processing delays.”