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IATA reports 28% drop in airline funds blocked by governments, but challenges persist

written by Newsdesk | June 4, 2024

IATA reports 28% drop in airline funds blocked by governments, but challenges persist

The International Air Transport Association (IATA) has reported a 28% decrease in the amount of airline funds blocked from repatriation by governments, with the total blocked funds standing at approximately $1.8 billion at the end of April, a reduction of $708 million since December 2023.

IATA 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. Willie Walsh, IATA’s Director General, emphasized that the efficient repatriation of airline revenues is not only guaranteed in bilateral agreements but also a prerequisite for airlines to provide economically critical connectivity.

The main driver of the reduction was a significant clearance of funds blocked in Nigeria, where 98% of the $850 million peak in blocked funds from June 2023 has been cleared. 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.

Walsh commended the new Nigerian government and the Central Bank of Nigeria for their efforts to resolve the issue, stating that individual Nigerians and the economy will all benefit from reliable air connectivity for which access to revenues is critical.

Despite the progress, 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.

Walsh urged Pakistan and Bangladesh to release the blocked funds immediately to ensure airlines can continue providing essential air connectivity. He noted that in Bangladesh, the solution lies with the Central Bank, which must prioritize aviation’s access to foreign exchange in line with international treaty obligations. In Pakistan, the solution involves finding efficient alternatives to the system of audit and tax exemption certificates, which cause long processing delays.


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