Nigeria, Ethiopia, Malawi withholding $28m revenue, says Kenya Airways CEO

Allan Kilavuka, chief executive officer, Kenya Airways, says Nigeria, Ethiopia, and Malawi are withholding about $28 million of revenue from the airline.

Kilavuka disclosed this recently while responding to a query, following reports that the Kenyan government was negotiating with its counterparts in Nigeria and Ethiopia to repatriate millions of dollars earned by Kenya Airways.

He said the block was affecting the carrier’s cash flow.

“The blocked funds are mainly a cash impact as we are not able to access these funds. We are, of course, also concerned about the devaluation of these funds going forward,” ch-aviation quoted him as saying in a email.

“Currently, we have approximately USD28 million blocked in mainly Nigeria, Ethiopia, and Malawi.”

The development adds to the controversy that has since trailed the repatriation of foreign airlines’ revenue trapped in Nigeria after news of the block of about $450 million by the country’s government first surfaced in May.

By July 2022, the trapped funds had increased to over $464 million, according International Air Transport Association (IATA).

The association had said that $1 billion was being withheld in 12 African countries, with Nigeria blocking the most amount.

Algeria, Ethiopia, Eritrea, and Zimbabwe jointly withheld a total of $350 million from foreign airlines, as at May.

Consequently, airlines have taken drastic steps against Nigeria’s aviation market in attempts to get their funds.

Emirates had recently announced that it would cease its operations in Nigeria from September 1, 2022, due to its inability to repatriate $85 million worth of local ticket sales.

British Airways (BA) also blocked Nigerian travel agents from issuing fresh tickets.

In a frantic move to stop the brewing crisis in the country’s aviation sector, the Central Bank of Nigeria (CBN) released $265 million to airlines to settle outstanding ticket sales.

The apex bank further called for an orderly exit of funds “for those that might be interested in doing so.”