The International Air Transport Association (IATA), based in Geneva, has expressed concerns over potential losses of up to $200 million for foreign airlines operating in Nigeria due to currency depreciation.
Regional Vice-President of IATA for Africa and the Middle East, said the issue of trapped funds exacerbated by the weakening naira against the dollar during a CNBC interview.
IATA’s remarks come amidst reports of $700 million in international airline ticket revenue still held in Nigeria, despite the Central Bank of Nigeria (CBN) claiming to have settled all verified debts to foreign airlines.
However, IATA responded quickly, stating that foreign carriers operating in Nigeria were still owed more than $700 million.
While local travel agents urge international airlines to adjust fares or face consequences, IATA insists that the CBN should settle all outstanding ticket revenue.
He warned in a statement that “Airlines should not be unfairly penalised by the lower exchange rate.”
However, in the interview with CBNC, AlAwadhi said, “You also have to take into consideration the blocked funds and the fair value of the blocked funds. If you have $720m blocked and then you devalue the naira by 30 per cent, you have wiped out over $200m of airlines’ money, and they have to compensate for that.
“Airlines have lost a lot of money operating in and out of Nigeria, and it continues to be so under the current environment.”
The devaluation of the naira has seen its value plummet from around 900 to over 1,400 against the dollar in recent weeks.