Airlines have $1.6bn in blocked payments in 20 countries, Iata says

About 67% of the funds are blocked in 12 countries in Africa, as governments seek to retain hard currency

Kamil Al Awadhi, Iata's vice-president for Africa and the Middle East, in Doha. Photo: Iata

Airlines are owed $1.6 billion from 20 countries as governments seek to retain hard currency, depriving the aviation industry of cash as it emerges from the coronavirus pandemic.

Of the blocked payments, 67 per cent of them are stuck in 12 countries in Africa, according to the latest figures released by the International Air Transport Association.

Nigeria is withholding $450 million in payments due to foreign airlines, the biggest amount held by any single African country, and the amount is rising every week, Iata said on Sunday in a briefing in Doha.

The global airlines' lobby group has held two rounds of discussions with Nigerian authorities, including the country's central bank, to help to negotiate the release of funds owed to foreign airlines operating in the country, Kamil Al Awadhi, Iata's vice president for Africa and Middle East, said.

“The excuse was that 'we don't have hard cash and this is why we can't do it' but you have to note that Nigeria is the biggest economy in Africa and Nigeria is the No 10 country in the world that exports oil,” he said.

“While I was in that meeting with the central bank, they were not responsive to handling the blocked funds and almost said, 'well, tell the airlines not to operate' and this is of course extremely damaging to the aviation industry inside Nigeria and internationally.”

Mr Al Awadhi said he will be returning to Nigeria “soon” for a third round of discussions to reduce the backlog, but did not say when.

“Hopefully, we can get some sort of solution where it starts going down. It won't, I doubt, be paid in a single shot,” he said.

Other African states withholding funds from foreign carriers include Zimbabwe with $100m, Algeria with $96m, Eritrea with $79m and Ethiopia with $75m, according to Iata data.

Blocked remittances have plagued airlines for years, but the situation is exacerbated by the pandemic that left airlines cash-strapped after two years of weak travel demand.

Global airlines are also facing the challenge of personnel shortages to meet staffing needs after a rebound in travel. Airlines were forced to lay off employees in large numbers at the peak of the pandemic a couple of years ago.

“There's a lot of logistics involved in starting an airline again, even if everything is in place,” Mr Al Awadhi said.

Airlines are struggling to recruit enough personnel and train new employees quickly enough to meet the rise in travel demand.

“The one worry that we have within the Mena region is the ability to maintain the right number of qualified staff 24/7 to cover the growth that the airlines are coming back to,” he said.

“We are working with the airlines and so far we're quite pleased with the preparation they've been managing to ensure that no safety issues arise unexpectedly.”

The co-operation and planning between Mena region's airports and airlines to re-hire staff so far has been “impeccable”, he said.