How $1.68 billion airlines’ trapped funds, high cost, infrastructure set aviation in Africa backward- IATA

Foreign airlines’ trapped funds in Africa hit a record $1.68 billion by the end of September 2023 according to the International Air Transport Association (IATA).

The funds are held by countries experiencing foreign exchange reserves. The countries are Ghana, Nigeria, Ethiopia, Angola and Zimbabwe.

IATA attributed trapped funds as one of the major issues plaguing aviation in Africa, describing the numbers as alarming with it having a huge and devastating impact on connectivity.

IATA’s Regional Vice-President of Africa and Middle East, Kamil Al Alwadi who spoke at the African Airlines Association (AFRAA) 55th Annual General Meeting (AGM) in Entebbe, Uganda said since 2018, a significant amount of blocked funds have been repatriated from Angola, Ethiopia, Ghana, Nigeria, and Zimbabwe through working with the respective governments.

“Aviation is capital intensive. Cash flow is key for airlines’ business sustainability – when airlines are not able to repatriate their funds, it severely impacts their operations and their decisions on where to fly.

“But the risk of blocked funds is not just limited to airlines; the negative impact extends to the countries blocking the funds. It impacts the country’s economy and its connectivity, and it hurts investor confidence and reputation. Aviation is not only an economic enabler; it is a pillar of modern economies”, the IATA chief said.

Governments, he said must prioritise aviation and find sustainable solutions in the clearing of blocked funds. He said IATA would continue to offer its support in any way they can.

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The IATA Chief lamented the state of aviation infrastructure in the continent, stressing that the facilities come with a high price tag; user charges across the continent are 8% higher than the industry average.

He disclosed that infrastructure charges must be set at levels that are fair, justified, and reflective of a value service proposition for airlines and passengers, adding that efforts through a pan-Africa fuel campaign have resulted in charges reductions in Chad, the Ivory Coast, and Zambia over the last five years.

Statistics show that Niamey, Niger Republic tops the list by charging passengers $162 on regional departure in African airports, followed by Monrovia (Liberia) $145; Guinea Bissau $137; Dakar, Senegal $116; Douala, Cameroon $115; Bangui $111; Freetown, Sierra Leone $109 and Nigeria $100.

International travelers at Bamako, Mali, Antananarivo, Madagascar, Cotonou, Benin Republic, Kinshasa, and Zaire pay $99; $91, $88, and $77 respectively. In Accra, Ghana it costs $77, N’djamena $68, Djibouti $67, Cairo 467, Lome, Togo $62, Entebbe, Uganda is $57. Charges by other African nations oscillate between $50 and $3.

Just in September this year while speaking at the 7th African Aviation Summit in Abuja, Al Alwadi, stated that research shows that Nigeria ranks highest in airport charges in Africa, saying Abuja Airport is the most expensive airport in Africa, closely followed by the Murtala Muhammed International Airport (MMIA), Lagos.

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He further stated the need for the Nigerian government to reduce the 27 charges imposed on African airlines amidst challenges with securing sustainable loan facilities.

He said, “Every time we come together, we must have open and frank discussions about the challenges Africa’s aviation industry is facing and opportunities to collaborate in order to maximize efficiency and minimize the present patchwork of inconsistent, outdated, and redundant rules and regulations.   It is this collaborative approach that will differentiate the outcome of Focus Africa from previous efforts.”

Focusing on Free Route Airspace (FRA), he stated that IATA has been driving the adoption of Free Route Airspace (FRA) in the region for many years.

“Last month, we saw successful trials with Kenya Airways and Ethiopian Airlines carried out with the support of AFRAA. We also continue to champion contingency management in the region and look in 2024 to drive more change through Focus Africa to ensure resilience in our system.”

“Many of the achievements that are made in safety and flight operations are a result of years of effort and engagement between partners, and we call on all stakeholders to continue these collaborations in mutually beneficial and meaningful ways. This brings me to another critical point which is participation.”

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Free Route Airspace (FRA) is a specified airspace within which users may freely plan a route between a defined entry point and a defined exit point.

Subject to airspace availability, the route can be planned directly from one to the other or via intermediate (published or unpublished) waypoints, without reference to the ATS route network. Within this airspace, flights remain subject to air traffic control.

Al-Alwadi reiterated that for IATA to deliver what matters to its members operating in and over the region, they need the voice of African carriers airlines.

“I will be honest here, participation by African carriers in many of IATA’s action-oriented safety and flight operations regional groups from airlines in the regions is weak. We need more carriers from the African continent, in order to play a stronger role in driving an agenda that suits you. I urge AFRAA / IATA members to be part of the forums that discuss and debate to drive our activities under the governance of the highest level at IATA.”

Wole Shadare