The regional Vice-President for Africa and the Middle East at the International Air Transport Association (IATA), Kamil Al Awadhi, has estimated that the cost of operating airlines in Nigerian airports remain among the most expensive in Africa.
Awadhi, who made this remark during an interview on CNBC Africa, disclosed that contrary to reports in the media, international airlines in Nigeria still had around $720 million trapped in the country, despite efforts by the Central Bank of Nigeria (CBN) to pay the affected airlines.
While reacting to questions bothering on the cost of air tickets in Nigeria, the IATA’s chief maintained that most foreign airlines operating in the country were making losses due to the high cost of plying Nigerian routes.
He clarified: “Airlines have lost a lot of money operating in and out of Nigeria and it continues to be so under the current environment. As things improve, then the airlines will start generating something then there is less risk and obviously, these costs will go down.
“You have to remember the cost of operating is one of the most expensive in all of Africa, the charges are definitely going to be more expensive.
“You also have to take into consideration the blocked funds and the fair value of the blocked funds. If you have $720 million blocked and then you devalue the naira by 30%, you have wiped out over $200 million of airlines’ money, and they have to compensate that”, Awadhi added.
He also confirmed that the CBN had repatriated only about $65 million out of the foreign airlines’ trapped funds in the country and regularly communicating with the affected airlines as a means of ensuring that outstanding issues relating to their claims are amicably resolved.
Industry experts have linked the surging costs of operations of airlines in the country partly to the depreciating foreign exchange (FX) value of the Naira against other foreign currencies over the years, particularly following the fuel subsidy removal and other monetary and fiscal policies by the President Tinubu-led administration.
The latest report by the National Bureau of Statistics (NBS) in its transport fares for December 2023, showed that the average cost of air transport rose by 87% between December 2022 and December 2023.
