International Airlines flying to the Eritrean capital Asmara are unable to repatriate their funds to their home countries.
According to the International Air Transport Association (IATA), as of March 31, 2019, the Eritrean government has blocked USD 73 million airlines fund.
Egypt Air, Turkish Airlines, Fly Dubai and Ethiopian Airlines operating to Asmara are unable to remit their ticket sales in foreign currency to their home base. Sources told The Reporter that the central bank of Eritrea is unable to allocate foreign currency to the international airlines due to the shortage of foreign currency it has been facing. Sources said Lufthansa and Qatar Airways have long stopped operation to Asmara for similar reasons.
Sources said that Ethiopian Airlines is waiting to repatriate six million dollars from Asmara. “We have no intention of suspending our flights to Asmara. This is just a temporary problem,” a senior executive of Ethiopian Airlines told The Reporter. Ethiopian Airlines resumed flight to Asmara in July 2018 after 20 years of suspension due to the conflict that erupted between the two countries in May 1998.
Eritrea is not alone. According to IATA, international airlines are facing challenges in repatriating their revenue from certain African countries to their home countries. IATA, which held its annual general meeting Seoul, South Korea this week, disclosed that five African countries have blocked more than 413 million dollars international airlines funds as of March 31, 2019.
According to the association Zimbabwe holds USD 192 million, Sudan 84 million, Algeria 80 million, Angola seven million, and Eritrea 73 million airlines funds.
Briefing reporters in Seoul, South Korea Muhammad Ali Albakri, IATA’s regional vice president Africa and the Middle East, said that IATA was doing a lot to get the blocked funds released. A special taskforce that comprises of member airlines has been established that works with governments. “We directly engage with governments, central banks and ministers of finance in those countries,” Albakri said.
“The director general himself travels to these countries to speak to the highest authority. In July he will travel to Zimbabwe to meet the president and specifically discuss the issue of blocked funds,” he said.
According to Albakri, last year IATA managed to get more than 500 million dollars released from Angola. Egypt and Nigeria have also cleared a huge sum of airlines blocked funds. However, the issue seems to be revolving. “We put out the fire in some places and it flares up in another place. It seems a never ending issue. We will continue working with governments, central banks and ministry of finance and we will continue lobbying,” Albakri said.
IATA is organising workshops advocating the issue of blocked funds. “We know how important these funds are to our member airlines. Cash flow is a life line to the airlines. If these problem persists airline will reduce their flight frequencies to these countries and may even pull out. This would eventually impact air connectivity in Africa,” Albakri told reporters.
In Africa Aviation supports 6.2 million jobs and generates 55.8 billion in GDP. At the end of 2018 global total blocked funds stood at USD 4.36 billion. The majority-3.8 billion-is in Venezuela where political instability dominates the agenda.
Presenting a report to IATA’s annual general meeting director general Alexander de Juniac said that excluding Venezuela, the backlog of funds awaiting repatriation was reduced by 11 percent. “Clearing 620 million in Angola and 251 million in Nigeria were major contributors to that achievement,” Juniac said.
