The International Air Transport Association, IATA has decried the continuous and drastic increase in the trapped funds of international airlines operating in Nigeria.
Investors King reports that in January 2023, the data had grown to $743,721,097 which is a 12.4 percent increment from the $662 million recorded in the corresponding period last year.
This was contained in a letter signed by the Area Manager of West and Central Africa, Dr. Samson Fatokun, on Tuesday which was addressed to the Minister of Aviation, Hadi Sirika.
In the letter, the association appealed to the Minister to urgently intervene and resolve the recurring matter of airlines’ blocked funds in the country.
Dr. Fatokun lamented that Nigeria has been marked as the country with the highest airline-blocked funds in the world amongst other countries for more than a year now.
According to him, foreign airlines trapped funds in the nation were $662m and $549m in January 2022 and December 2022 respectively but suddenly rose to $743m.
Enumerating the effects of the situation on the nation’s economy, Fatokun noted that foreign direct investment will be affected due to the massive backlog of funds.
He explained that the overlapping trapped funds contradict the Bilateral Air Service Agreement which should be looked into.
On arresting the unpleasant situation, Fatokun disclosed that the airlines have taken some actions like cutting down the number of seats put out for sale in the market in order to reduce the number of passengers and cargoes’ access to the country.
“Going by the law of demand and supply, the reduction of airline inventories in the Nigerian market will lead to the ticket fare increase, which will further burden average Nigerians,” he said.
However, the Minister of Aviation, Hadi Sirika held a meeting with the IATA team, foreign airlines and travel agents on Tuesday to address the matter.
He promised the international airlines of prompt action as the issue will be tabled before the presidency and the Central Bank of Nigeria, CBN for a solution.