IATA reports $1.7bn in airline funds are currently blocked from repatriation, showing slight improvement from earlier in the year.
Significant reductions in blocked funds were noted in Pakistan, Bangladesh, Algeria, and Ethiopia, while issues have risen in the XAF/XOF zones and Mozambique, with Bolivia emerging as a new concern.
Nine countries account for 83pc of the total blocked funds, with Pakistan consistently at the top of the list due to bureaucratic challenges.
The economic implications of these blocked funds are severe; if unresolved, they risk undermining airline services and economic connectivity, highlighting the need for government action to facilitate revenue repatriation.
Willie Walsh, IATA’s Director shared “Over the last six months, we have seen significant reductions in blocked funds in Pakistan, Bangladesh, Algeria and Ethiopia. At the same time, amounts are rising in the XAF /XOF zones and Mozambique. Bolivia has also emerged as a problem, where repatriating sales revenues is becoming increasingly difficult and unsustainable for airlines. This unfortunate game of ‘whack-a-mole’ is unacceptable. Governments must remove all barriers for airlines to repatriate their revenues from ticket sales and other activities in accordance with international agreements and treaty obligations.
“No country wants to lose aviation connectivity, which drives economic prosperity. But if airlines cannot repatriate their revenues, they cannot be expected to provide a service. Economies will suffer if connectivity collapses. So, it is in everyone’s interest, including governments, to ensure that airlines can repatriate their funds smoothly,”
- Pakistan continues to top the list of blocked funds countries at $311m. This is an improvement from $411m in April 2024. The main issue is the system of audit and tax exemption certificates which is causing long processing delays.
- Bangladesh has seen the amount of blocked funds decrease to $196m (from $320m in April). The Central Bank needs to continue to prioritize airlines’ access to foreign exchange in line with international treated obligations.
- About $1bn of airline money blocked from repatriation is in African countries. That is about 59pc of the global tally. Over the last six months, there were significant reductions in blocked funds in Algeria ($193m from $286m April) and Ethiopia ($43m from $149m in April). At the same time, XAF Zone (+$84m), Mozambique (+$84m) and XOF Zone (+$73m) contributed to the largest increases.
- Bolivia is new to the list of blocked fund countries. A further deterioration in the availability of foreign exchange, particular the US dollar, has resulted in an estimated $42m in airline funds being blocked in the country.
