Airlines face overflight payment risks as planes divert over Afghanistan

Airlines are turning to a network of third parties to pay fees to Afghan authorities as more planes use the country’s airspace, increasing the risk of legal disputes and money laundering, according to pilots, aviation executives and lawyers.

In the last year more airlines have started flying over Afghanistan as conflict in the Middle East widened and as aviation regulators softened their stance on using Afghan airspace.

The Taliban says publicly that this has led to a surge in overflight payments – fees that countries typically charge airlines for navigation services in their airspace.

However, the process of making these payments to the Taliban-run aviation authorities is complicated by the freezing of Afghanistan’s government bank accounts overseas and Western sanctions on Taliban leaders.

The challenges airlines face making overflight payments to Afghanistan, including a reliance on intermediaries and a lack of invoices, are detailed here for the first time.

Before the Taliban came to power in 2021, the International Air Transport Association industry group collected overflight charges on behalf of Afghanistan’s aviation authority.

IATA told Reuters that it ceased this service in September 2021, leaving millions of dollars in charges collected for the previous Afghan government frozen in its accounts.

Airlines and private jet operators have instead turned to third-party intermediaries, known as trip support firms, to process payments to the Afghanistan Civil Aviation Authority, according to six people familiar with the process, including pilots, airline officials, and third-party payment firms.

Some third-party permit specialists use additional intermediaries – primarily based in the United Arab Emirates – to facilitate payments to the ACAA.

This has added to the complexity of making payments to Afghanistan, and, according to lawyers and sanctions experts, could pose legal and financial risks for the industry.

For instance, several Western trip support firms have never received an invoice for overflight fees from Afghan authorities, making it near-impossible to make payments, said

Jon Braid, who owns Jet Team, a British-based trip support company.

“The biggest difficulty is basically finding a way to pay the bills … no one sent us a bill yet,” Braid said.

The Taliban did not respond to a request for comment.

In response to Reuters questions, a Lufthansa spokesperson said the airline was in full compliance with relevant sanctions, declining to comment further on its payments to Afghanistan.

The other airlines declined to comment or did not respond to questions on how they pay Afghan overflight fees.

Reuters found no indication of any sanctions breaches or wrongdoing by airlines or financial intermediaries. The U.S. Treasury in 2022 provided expanded authorisation, including for air navigation services, to allow financial transactions with Afghan institutions, including those run by the Taliban.

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Afghanistan charges a flat $700 fee to transit its airspace. According to FlightRadar24 data, it should have made close to $6 million each month in October, November and December, based on the number of overflights.

Finding ways to pay Afghan aviation authorities has increased the risk of illicit financial flows and raises the possibility of legal disputes if payments are not completed or fail to reach the intended recipient, three lawyers and sanctions specialists told Reuters.

Industry sources say countries can sometimes lack the administrative resources to invoice and collect payments, despite issuing permits.

Reuters contacted more than a dozen financial aviation intermediaries in the UAE, a main hub for the industry.

Some said they were helping private jets and commercial airlines get permits for Afghanistan but they declined to be named or reveal the identity of their clients and to detail how or whether payments are made.

One large company that does arrange permits told Reuters it can take six months to a year for Afghanistan’s aviation authority to send invoices to airlines, meaning they can rack up large outstanding bills.

Others said they chose not to arrange overflight permits to avoid any banking or legal complications.

Last year the UAE was dropped from a list of countries at high risk of illicit money flows, compiled by the Financial Action Task Force, a global watchdog. However, the European Union still lists it as a high-risk country.

“Since its removal from the FATF grey list, the UAE has further strengthened its regulatory framework, ensuring strict oversight across all sectors,” a spokesperson for the UAE government told Reuters.

Reuters asked the Taliban how much it had made in overflight fees to date and did not receive a response.