The International Air Transport Association (Iata) has called on the government of Ethiopia to act swiftly to clear the $95 million in airline funds blocked from repatriation to ensure the country's connectivity is not threatened.
The ability to repatriate revenues is guaranteed in international agreements, Iata said in a statement issued during a news briefing in Addis Ababa earlier this morning, 20 June.
"All parties must abide by these agreements to keep the world connected by air."
Iata director general Willie Walsh said: "The low allocation of USD to the aviation industry by the Ethiopian Government and Central Bank means that $95 million in airline funds is blocked in the country.
"This sends all the wrong signals and puts at risk the economic and social benefits that its global hub supports Ethiopia's development with. Ethiopia must follow the global rules that it benefits from. It's time for the government to work with the industry to resolve this situation quickly."
According to Mesfin Tasew, Ethiopian Airlines CEO, the carrier is performing very well.
"Our current performance, in all parameters, indicates that our success will continue strongly. We have recovered well from the impacts of the pandemic. By the end of this fiscal year, we expect to generate $6.1 billion, a 20% growth compared to last year's performance," he said.
"We will be transporting 13.7 million passengers, which is also a 55% increase from the same period last year. While our operations and milestones remain persistent, we still have challenges regarding repatriating our accumulated funds in various countries. Today, we have more than $180 million stranded in several countries. Transferring funds remains a critical challenge for airlines."
Walsh said: "Ethiopia's aviation industry is set to triple by 2040, with an average 6% growth in passenger traffic over the next 17 years. The Ethiopian government is uniquely positioned to SAF (stimulate sustainable aviation fuel) production, which would not only support the forecast surge in air travel but also trigger substantial job creation and boost the local economy. Ethiopia has the opportunity to take the lead and, in doing so, construct an aviation future that is as sustainable as it is successful."
However, the current issue is the risk to Ethiopia's aviation connectivity because of the non-repatriation of airline funds.
The Iata statement pointed out that:
- Ethiopia's benchmark regional connectivity (within Africa) stands at 113% of pre-crisis levels according to IATA's Connectivity Index.
- Passenger traffic originating from Ethiopia tracked at 19% above pre-crisis levels in the first quarter of 2023 (latest data). This is well ahead of Africa's overall passenger demand, which stood at 8.7% above pre-crisis levels in the first quarter.
It has since been reported that blocked funds have increased by 47% to $2.27 billion in April 2023, which will continue to damage airline connectivity worldwide.
