IATA Confirms $575m Foreign Airline Revenue Trapped in CBN

The International Air Travel Association (IATA) has confirmed that $575 million in revenue generated by foreign airlines in the country was trapped in the Central Bank of Nigeria (CBN) as at March this year.

This was disclosed by IATA’s Area Manager, South West Africa, Dr Samson Fatokun, at the Aviation Day in Abuja.

The foreign airlines have found it increasingly difficult to repatriate their earnings due to the dollar shortage in the country brought on by the low earnings from crude oil sales.

Fatokun however explained that IATA had been engaging government through the Ministry of Transportation, CBN and the vice-president’s office.

“We are engaging government through the ministry, CBN and vice-president and government is giving the aviation the best possible attention the sector deserves. We are addressing the issues and government is giving us support,” Fatokun said.

IATA also spoke on the high charges and taxes levied on airlines, saying that African countries have the highest charges and taxes on airlines in the world.

The Regional Vice-President, Africa and Middle East, Hussein Abbas, said while the continent has the highest charges and taxes in the world, Senegal and Nigeria have the highest taxes on the continent, noting that high taxes discourage passenger patronage and keep travellers away from the airports.

Abbas said since crude oil prices crashed, airlines in Africa still buy aviation fuel at very exorbitant rates, adding that IATA and the International Civil Aviation Organisation (ICAO) had been engaging governments of nation states in the region to reduce such charges and introduce them in a transparent way so that they would reflect the services they provide to the airlines.

“Governments in Africa see aviation as a cash cow. Charges and taxes in Africa are 20 per cent higher than any other part of the world. Despite the fall in crude oil prices, it has not reflected on the prices of aviation fuel for airlines in Africa.

“The less the charges, the more the passengers will come to the airport. With high charges, you kill the goose that lays the golden egg,” Abbas said.

IATA said it is unfortunate that Africa still depends on primary commodities for foreign exchange earnings, adding that there was need to focus and develop the aviation industry to boost economic development in the region.