Blocked Airline Funds Decrease To $1.8 Billion, IATA Reports Progress

The International Air Transport Association (IATA) has reported a 28% decrease in the amount of airline funds blocked from repatriation by governments. As of the end of April, the total blocked funds stood at approximately $1.8 billion, a reduction of $708 million since December 2023. These figures were released at the 80th IATA Annual General Meeting (AGM) and World Air Transport Summit, held in Dubai from 2 to 4 June 2024.

This event, hosted by Emirates Airline, marks the first time it is being held in the UAE. Over 1,500 participants are expected to attend, including industry leaders, government officials, and media representatives. IATA has reiterated its call for governments to remove all barriers to airlines repatriating their revenues from ticket sales and other activities in accordance with international agreements and treaty obligations.

"The reduction in blocked funds is a positive development. The remaining $1.8 billion, however, is significant and must be urgently addressed," said Willie Walsh, IATA’s Director General. "The efficient repatriation of airline revenues is guaranteed in bilateral agreements. Even more importantly, it is a pre-requisite for airlines—who operate on thin margins—to be able to provide economically critical connectivity."

The main driver of the reduction was a significant clearance of funds blocked in Nigeria. Egypt also approved the clearance of its significant accumulation of blocked funds. However, in both cases, airlines were adversely affected by the devaluation of the Egyptian Pound and the Nigerian Naira.

At its peak in June 2023, Nigeria's blocked funds amounted to $850 million, significantly affecting airline operations and finances in the country. Carriers faced difficulties in repatriating revenues in US dollars, leading some airlines to reduce their operations and one carrier to temporarily cease operations to Nigeria. However, as of April 2024, 98% of these funds have been cleared.

"We commend the new Nigerian government and the Central Bank of Nigeria for their efforts to resolve this issue," Walsh stated. "Individual Nigerians and the economy will all benefit from reliable air connectivity for which access to revenues is critical. We are on the right path and urge the government to clear the residual $19 million and continue prioritizing aviation."

Global Impact

Eight countries account for 87% of the total blocked funds, amounting to $1.6 billion. The situation has become severe in Pakistan and Bangladesh with airlines unable to repatriate $731 million ($411 million in Pakistan and $320 million in Bangladesh) of revenues earned in these markets.

IATA continues to advocate for the removal of barriers that prevent airlines from accessing their rightful earnings. The association emphasises that no business can operate long-term without access to its earned revenues, which is crucial for maintaining global air connectivity.

With inputs from WAM