Nigeria, Ethiopia, and Malawi are withholding about USD28 million of revenue from Kenya Airways (KQ, Nairobi Jomo Kenyatta), impacting the carrier's cash flow, says Chief Executive Officer Allan Kilavuka.

"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," he told ch-aviation by email. "Currently, we have approximately USD28 million blocked in mainly Nigeria, Ethiopia, and Malawi," he said.

Kilavuka was responding to a query from ch-aviation following reports that the Kenyan government was negotiating with its counterparts in Nigeria and Ethiopia to repatriate tens of millions of dollars that belong to Kenya Airways.

This comes after Emirates (EK, Dubai International) recently announced that it would stop serving Nigeria from September 1, 2022, given its inability to repatriate USD85 million worth of local ticket sales. Emirates said its Nigerian operation had become unviable due to accumulating operational losses of USD10 million per month and unremitted funds.

The International Air Transport Association (IATA) has warned that airlines cannot be expected to fly if they cannot realise the revenue from ticket sales. Nigeria alone, in July 2022, had blocked USD464 million of total airline funds from repatriation.

In 2021, twenty governments withheld about USD1 billion from the sale of tickets, cargo space, and other airline activities. Four countries: Bangladesh (USD146.1 million), Lebanon (USD175.5 million), Nigeria, and Zimbabwe (USD142.7 million) accounted for more than 60% of this total, but there had been positive progress in reducing blocked funds in Bangladesh and Zimbabwe, IATA said.

Meanwhile, Kenya Airways reported a steady recovery in its Half Year 2022 results, posting a 76% increase in year-on-year revenue to KES48.1 million shilling (USD401,149) and a 31.5% reduced operating loss from KES7.3 billion (USD60.8 million) in 2021 to KES5 billion (USD41.7 million) in 2022. High fuel costs negatively impacted the airline's results by up to USD6 million, Kilavuka confirmed.