IATA to re-engage Nigeria on $743mn trapped airlines' funds

The International Air Transport Association (IATA) has raised concerns over the situation surrounding the $743 million trapped airline funds in Nigeria. Kamil Alawadhi, the Regional Vice President for Africa and the Middle East at IATA, highlighted the potential devastating impact this issue could have on the aviation industry in Nigeria. Alawadhi stressed the urgency of the matter and revealed plans to re-engage with the Nigerian government to find a resolution. The protracted issue of trapped funds has been a longstanding challenge for foreign airlines operating in Nigeria. Alawadhi expressed hope that with Nigeria undergoing a political transition and welcoming changes such as a new central bank governor, there might be renewed focus and commitment to addressing the problem. He emphasized the critical need for fresh perspectives to tackle the issue promptly before irreparable damage is done. One of the key concerns highlighted by IATA is the financial strain on foreign airlines caused by the blocked funds. Alawadhi pointed out that many airlines have exhausted their financial reserves due to the prolonged wait for repatriation of funds. This situation has forced airlines to explore measures like refinancing aircraft or selling off assets to sustain their operations, making it increasingly challenging for them to continue flying to Nigeria. The delays in addressing the trapped funds issue have put significant pressure on airlines, affecting their profitability and operational capabilities. Alawadhi underscored that the ongoing financial constraints could eventually lead to a breaking point for aviation in Nigeria if not resolved promptly. Despite engaging with Nigerian authorities in the past, Alawadhi noted that while there have been positive assurances regarding the funds' repayment, the actual implementation has faced setbacks, contributing to the escalating value of the trapped funds. The failure to honor commitments and delays in resolving the issue have further exacerbated the financial burden on airlines, pushing the situation towards a critical juncture. The implications of the trapped funds extend beyond the aviation sector, impacting the Nigerian economy at large. Alawadhi cautioned that the aviation industry's contribution to the country's GDP and employment opportunities could be jeopardized if the issue persists. He emphasized the symbiotic relationship between aviation and economic growth, citing examples of thriving aviation hubs like Dubai and Istanbul as models for Nigeria to consider. Amid the growing concerns, IATA is set to intensify its efforts to seek a resolution to the trapped funds issue in Nigeria. Alawadhi expressed optimism about engaging with the government and stakeholders to find a mutually beneficial solution that safeguards the interests of foreign airlines and preserves the vitality of Nigeria's aviation industry. The aviation community awaits concrete action from Nigerian authorities, particularly the Central Bank of Nigeria, to address the long-standing issue and prevent further escalation of the crisis. The outcome of these deliberations will not only shape the future of airline operations in Nigeria but also have far-reaching implications for the country's economic development and global connectivity.