IATA lauds Nigeria for releasing funds, but slams airport charges

IATA has scored a spectacular success in releasing blocked airline funds in Nigeria over the past year.

Image: IATA

The sum owed, which peaked at $850 million in 2023, now virtually zero, reported Kamil Alawadhi, Regional Vice-President, Africa & the Middle East of IATA, speaking at the 80th IATA Annual General Meeting being held in Dubai from 2-4 June.

While it can “close the Nigerian chapter” of the blocked funds issue, Alawadhi took aim at Nigeria’s Lagos International Airport as the “worst offender” in Africa with unjustified increases in airport charges combined with totally inadequate airport infrastructure

Overall, IATA reported a 28% decrease in the amount of airline funds blocked from repatriation by governments over the past year. The total blocked funds at the end of April stood at approximately $1.8 billion, a reduction of $708 million since December 2023.

According to Alawadhi, the main driver of the reduction was a significant clearance of funds blocked in Nigeria, while Egypt also approved the clearance of its significant accumulation of blocked funds.

IATA began working constructively on the blocked funds issue with a newly appointed Nigerian government in May 2023, said Alawadhi: “This government has been extremely active and very engaged and so things started moving positively. I would like to thank them the government and all stakeholders who worked with IATA to help get this sorted out,” he added.

The resolution of the blocked funds issue will “absolutely” see more carriers return to Nigeria, aviation will “blossom” and air fares, which had become expensive, will fall, believed Alawadhi. “You are going to have more traffic in and out of Nigeria because people can afford to travel.”

However, there remain several African and Middle countries that are top of the current blocked funds list, which totals $1.6 billion, with eight states responsible for 87% of the total. They are Pakistan $411m; Bangladesh $320m; Algeria $286m; XAF zone (Central African states) $151m; Ethiopia $149m; Lebanon $129m; Eritrea $75m; Zimbabwe $69m.

Alawadhi described how IATA has seen a “rush” of many states in his region to increase charges and prices for a variety of reasons. His team’s strategy to combat this trend is to get ahead of the game.

“We have taken an aggressive position to try and jump the gun and engage with the stakeholders,” he said.

Alawadhi said the strategy has worked well with the authorities in Saudi Arabia, Egypt and South Africa where IATA’s engagement has helped educate stakeholders and develop more beneficial regulatory changes.

However, in Nigeria IATA’s attention now turns from blocked funds to the airports issue.

“Lagos just keeps on increasing [charges],” said Alawadhi. “[The airport] infrastructure is falling to pieces, baggage belts don’t work, there has been no air conditioning for the last six years, yet they rank as the most expensive airport in all of Africa.” He also pointed out that Nigeria’s Abuja airport is one of the most expensive in Africa.

“Airlines and passengers are paying through the nose for an expensive airport that provides nothing in return. We constantly sit down with them to demonstrate the negative impact of increasing charges,” said Alawadhi.

Mark Pilling

Mark Pilling

Mark is a consulting editor to Arabian and African Aerospace.