The International Air Transport Association (IATA) has expressed worry over the trapping of $601 million airlines’revenue blocked in 17 African countries since the onset of COVID -19 over a year ago.
Blocked funds are owed to airlines that could not be repatriated to their country in routes they fly to.
According to the global airlines’ regulator the inability of these countries: Algeria, Angola, Benin,Burundi, Central African Republic, Eritrea, Ethiopia, Equatorial Guinea, Malawi, Mozambique, Nigeria, Sudan, Gabon, Cameroon, Chad, Congo and Zimbabwe to repatriate the large sum is creating unease for the carriers struggling for survival.
The global regulator has therefore urged governments in Africa to take steps in escalating priorities in areas not limited to: continued financial relief and the release of committed aid and blocked funds, safe reopening of borders and planning for the safe restart of aviation business.
Besides, the steps to be taken by the governments, IATA said eight airlines in Africa were in dire financial straits as some have filed for bankruptcy or entered business administration over the 12 past months notwithstanding the $2.4 billion secured as government aid last year.
According to the global airlines’ regulator, most of the $2.2 billion was distributed through direct government loans , equity financing and cash injection.
Investigations have shown that over $30 billion pledged for air transport and tourism in Africa by International finance agencies and other institutions, including the African Development Bank (AfDB), African Export Import Bank, African Union and the International Monetary Fund (IMF), is however, yet to reach the airlines and other aviation stakeholders in need.
Speaking in an interview, IATA’s Regional Vice President Africa and the Middle East, Kamil Al Awadhi said : “African airlines posted a combined loss of $2 billion in 2020. This year we expect only a slight improvement of $1.7billion loss as the struggle with COVID-19 continues.
“Looking ahead it’s unlikely that traffic will return to post COVID-19 levels until 2023. Financial relief measures are still desperately needed, particularly those that do not increase the industry’s debt burden. Additional relief measures and activating existing pledges are essential.
“But, the industry could get better if government relief is administered in different forms. Cost reductions in terms of taxes and charges will help. And the release of the $601 million of airline revenues that are currently blocked from repatriation in certain governments would be an immediate boost in some markets.
