The cost of operating airlines in Nigerian airports is one of the most expensive in Africa.
It is also the reason for the high cost of airline tickets in the country.
Regional Vice-President for Africa and the Middle East at the International Air Transport Association (IATA) Kamil Al Awadhi, made this known in an interview on CNBC Africa.
He also clarified that international airlines in Nigeria still have about $720 million in trapped funds.
While responding to questions bothering on the cost of air tickets in Nigeria where he stated that airlines continue to lose money operating in and out of Nigeria, Kamil said: “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.”
Continuing, he noted that “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.”
The IATA vice president also noted that the CBN has repatriated only about $65 million of the blocked funds owed to airlines but has been in regular communication with the airlines unlike it was during the previous administration.
International airlines operating in Nigeria had earlier claimed to have around $813 million trapped in Nigeria- a figure that is one of the highest in the world.
The CBN recently said it has disbursed about $62 million as part of settling the backlog.
