• September 26th, 2018
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Blocked funds will not affect AirNamibia’s flights to Angola

Business & Finance
Business & Finance

  Dublin Air Namibia’s operations into neighbouring Angola will not be affected by the fact the Angolan central bank has blocked the repatriation of the airline’s funds due to a shortage of foreign currency in that country. The shortage of foreign currency in Angola has been linked to falling oil prices, a mainstay of the Angolan economy. At its annual general meeting in Dublin, Ireland last week the International Air Transport Association (IATA) called on all governments to respect international agreements obliging them to ensure airlines are able to repatriate their revenues. IATA estimates that Angola, which is listed among the top five nations that have blocked airline revenues, has for the last seven months held about US$237 million belonging to various airlines operating there. While industry insiders speculate that millions of Air Namibia’s dollars are currently held in Angola, the airline said it is not at liberty to divulge the exact amount. The other countries on the top revenue five blocking list are Venezuela, Nigeria, Sudan and Egypt. “At this point we are waiting for the central bank of Angola to be in a position to make funds available to the airlines in Angola. Air Namibia is not in a unique situation in this… It is really every airline, big and small, whether it is us or Emirates or Kenya Airways. It obviously would be good if we can get access to those funds as soon as possible,” said Air Namibia’s acting managing director, Adv Mandi Samson. During an exclusive interview with New Era, Samson explained that Air Namibia has “worked hard” to gain market share in Angola. “For an economic matter, which may be of short duration, you would not want to minimise your market share, because its very difficult to get that market share back once it has been lost,” Samson noted. Meanwhile, IATA director general and CEO Tony Tyler said during the AGM that air connectivity is vital to all economies. “The airline industry is a competitive business operating on thin margins. So, the efficient repatriation of revenues is critical for airlines to be able to play their role as a catalyst for economic activity. It is not reasonable to expect airlines to invest and operate in nations where they cannot efficiently collect payment for their services,” said Tyler. IATA monitors blocked funds globally, the sum of which exceeds US$5 billion. The top two countries blocking the repatriation of airline funds are Venezuela and Nigeria. Airline funds blocked from repatriation in Venezuela total US$3.8 billion. Currency controls implemented there in 2003 necessitate government approval to repatriate funds. By 2013, approvals were not keeping pace with the amount of funds requiring repatriation and significant airline revenue accumulated in Venezuela. The situation became critical in 2015 when only one request to repatriate funds was approved. So far in 2016 only one request to repatriate funds has been granted. Total airline funds blocked from repatriation in Nigeria are nearing US$600 million. Repatriation issues arose in the second half of 2015 when demand for foreign currency in the country outpaced supply and the country’s banks were not able to service currency repatriations. Nigerian authorities are engaged with the airlines and are, together with the industry, exploring possible measures to unblock the funds. “Blocked funds are a problem in a diverse group of countries, some of them undergoing significant economic challenges, particularly with a fall-off in oil revenues. But one thing all five nations have in common is the urgent need for robust air connectivity that is being hampered by airlines’ difficulty in repatriating funds. Strong connectivity is an economic enabler and generates considerable economic and social benefits, something that struggling economies need more than ever. It is in everybody’s interest to ensure that airlines are paid on time, at fair exchange rates and in full,” Tyler concluded.   ===========    
2016-06-09 11:31:52 2 years ago
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