Out of total US$1.2 billion of global aviation industry funds blocked by governments, 93% of the capital is trapped in Africa and Middle East (AME) countries. In fact, 10 countries across Africa, the Middle East, and South Asia account for 89% of the total blocked funds, amounting to US$1.08 billion. The AME region total blocked funds are spread across 26 countries.
Blocked funds are revenues earned by airlines in a particular country that cannot be repatriated in US dollars due to foreign exchange controls, currency shortages, or regulatory barriers. These funds are typically generated from ticket sales, cargo services, and other commercial activities, but remain trapped in the country of sale, often for extended periods.
This week the International Air Transport Association (IATA) reported a marginal improvement of US$100 million that has been made since April this year of the US$1.2 billion as of the end of October 2025 in airline funds blocked. As such IATA has called on governments to lift all restrictions on currency repatriation and allow airlines to access their revenues in US dollars from ticket sales, cargo sales and other activities, as guaranteed in bilateral air service agreements and treaty obligations. Restrictions include burdensome or inconsistent procedures to obtain repatriation approval, delays in obtaining approval, shortage or lack of foreign exchange or other limitations imposed by governments or central banks.
“Airlines need reliable access to their revenues in US dollars to keep operations running, pay their bills, and maintain vital air connectivity. Governments have committed to unfettered repatriation of funds in bilateral agreements. With low margins and significant dollar denominated costs, airlines depend on governments fulfilling that commitment. It is also in the interest of governments to foster the economic catalyst that airlines provide by connecting their economies globally. That’s why we urge governments to facilitate the efficient repatriation of airline funds and prioritise this in foreign exchange allocations, even when currency is in short supply,” said Willie Walsh, IATA’s director general.
Airlines earn revenues in local currencies, but timely repatriation in US dollars is essential to meet dollar-denominated expenses like leasing, fuel, maintenance, and salaries. Delays and denials violate international treaties and bilateral agreements and increase exchange rate risks.
IATA recently elaborated that blocked funds create significant financial and operational challenges for airlines and have a wider impact on travellers, businesses and investors. Airlines rely on timely access to revenue to cover operational costs, including fuel, maintenance, salaries, and leasing fees. Reliable access to revenues is critical for any business, particularly airlines which operate on very thin margins.
Moreover, if the exchange rate between the local currency and the currency of repatriation changes while the funds are blocked, the value of those funds could decrease, resulting in financial loss for the airline.
Meanwhile, persistent issues with blocked funds may force airlines to reduce service or suspend operations to affected markets. This causes airfare to rise, impacting tourism, trade, and jobs. Economic growth relies on international connectivity and countries with a history of blocked funds may be viewed as high-risk markets, potentially discouraging future investment.
“Political and economic instability are key drivers of currency restrictions across Africa and the Middle East, resulting in large sums of blocked funds. We recognise that allocation of foreign exchange is a difficult policy decision, but the long-term benefits for the economy and jobs outweigh short-term financial relief,” Walsh added.
For the first time, Algeria sits at the top of IATA’s list of blocked funds countries. Significant increases have been reported due to a new approval requirement by Algeria’s ministry of trade, adding to the already burdensome documentation requirements. IATA has urged the government of Algeria to remove unnecessary processes and requirements for airlines.
– ebrandt@nepc.com.na