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News: IATA urges Ethiopian gov’t to swiftly release $95 million blocked airline funds to avert airline connectivity threats

IATA Director General Willie Walsh Speaking at the ongoing IATA Focus Africa conference in Addis Abeba. Photo: IATA

Addis Abeba – The International Air Transport Association (IATA) has called on the government of Ethiopia to swiftly clear $95 million airline funds blocked from repatriation to ensure the country’s connectivity is not threatened. 

In a statement sent to Addis Standard amidst the IATA Focus Africa conference which is being held today and tomorrow in Addis Abeba, the association said Ethiopia must abide by the international agreements that guarantee the repatriation of airlines revenues to keep the world connected by air.

“This sends all the wrong signals and puts at risk the economic and social benefits that its global hub supports Ethiopia’s development with”

Willie Walsh

“The low allocation of USD to the aviation industry by the Ethiopian Government and Central Bank means that $95 million in airline funds are blocked in the country,” said Willie Walsh, IATA’s director general.

“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 industry to resolve this situation quickly.”

The statement quoted Mesfin Tasew, Ethiopian Airlines Group CEO as saying that despite recovering well from the impacts of COVID-19 and persistent performance, the airlines still have challenges regarding expatriating accumulated funds in various countries.

“We have more than $180 million stranded in several countries. Transferring funds remains a critical challenge for airlines,” Mesfin said.

“By the end of this fiscal year, we expect to generate USD6.1 billion, this is a 20% growth compared to our last year’s performance. We will be transporting 13.7 million passengers which is also a 55% increase from same period last year,” he added.

This comes in the backdrop of the recent change in the leadership of the board of Ethiopian Airlines Group which saw the replacement of veteran aviation executive Girma Wake by the country’s Air force commander Lieutenant General Yilma Merdassa. Ethiopian Airlines, the country’s single largest source of foreign currency did not explain the reason behind the change.

According to the statement by IATA, Ethiopia is recovering strongly from the COVID-19 crisis with its benchmark intra-Africa regional connectivity standing at 113% of pre-crisis levels according to IATA’s connectivity Index, and with passenger traffic originating from Ethiopia tracked at 19% above pre-crisis levels in the first quarter of 2023.

This is “well ahead of Africa’s overall passenger demand which stood at 8.7% above pre-crisis levels in the first quarter,” the statement noted.

IATA said full implementation of the Single African Air Transport Market (SAATM) which could create 21,000 new jobs and add $81.8 million to the GDP, and fostering the growth of a Sustainable Aviation Fuel (SAF) industry to reducing the aviation industry’s carbon footprint are additional key priorities to support a strong aviation sector in Ethiopia.

“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 stimulate SAF production, a move that would not only support the forecast surge in air travel but also trigger substantial job creation and boost the local economy,” said Walsh. AS

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