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The Nigerian government owes a number of international air carriers U.S. $575 million dollars in ticket costs because the ongoing oil-price crisis has depleted the African country’s reserves of U.S. currency and prompted officials to restrict funds eligible to be moved abroad.
The millions of dollars in ticket costs had been due for payment on March 31st, according to the International Air Transport Association (IATA). The Central Bank of Nigeria released funds to partially pay off the debts on that date, Bloomberg reports.
Airline companies must agree to “a realistic and achievable payment schedule,” the indebted country’s Vice President Yemi Osinbajo told the CEO of IATA, Tony Tyler, earlier this week.
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The carriers that are owed funds could begin severing ties with Nigeria’s airports - hurting the developing country’s status as a regional hub for travelers in western Africa – if the government does not pay up soon.
The first quarter of 2016 saw the national economy contract for the first time in over a decade, largely due to the low barrel price of oil. The country’s reserves of foreign currency have descended to U.S. $26.5 billion - the lowest amount in over 10 years.
In 2014, three American carriers - United Airlines, Delta Airlines, and American Airlines – significantly reduced the number of flights to and from Venezuela when an inflation issue limited the government’s access to dollars.
The companies had U.S. $3.9 billion worth of Venezuelan bolivars stuck in the South American country due to the succeeding monetary restrictions, according to estimates from IATA. At the time, the bolivar’s inflation rate had reached 61 percent.
In January, American Airlines wrote off U.S. $592 million trapped in Venezuela and other carriers have struggled to get a hold of their earnings since.
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Egyptian officials have limited the ability of British Airways and Air France-KLM Group to access their ticket sale revenues as a result of the erosion of foreign exchange reserves caused by political instability.
IATA is “optimistic that a solution will be found” to Egypt’s crisis as of Wednesday. The country’s reserves had dropped to just over US$13 billion as of April 2016.
By: Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…