The International Air Transport Association (IATA) recently reported a notable 28% reduction in the total funds blocked by governments, affecting airline revenues from ticket sales and other activities. By the end of April 2024, the amount stood at approximately $1.8 billion, marking a decrease of $708 million since December 2023.
IATA has consistently advocated for the elimination of governmental restrictions that prevent the free repatriation of airline revenues, aligning with international agreements and treaty obligations. Willie Walsh, IATA’s Director General, emphasized the importance of this issue, stating, “The reduction in blocked funds is a positive development. The remaining $1.8 billion, however, is significant and must be urgently addressed. 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. No business can operate long-term without access to rightfully earned revenues.”
A major factor contributing to the decline in blocked funds was significant progress in Nigeria. The country managed to clear up to 98% of the previously blocked $850 million by April 2024. However, despite these efforts, the repatriation process was complicated by the devaluation of the Nigerian Naira and the Egyptian Pound, as similar issues were encountered in Egypt.
At the height of the crisis in June 2023, Nigeria’s blocked funds severely impacted airline operations, prompting some carriers to scale back or temporarily suspend their operations in the region. Nevertheless, recent actions by the Nigerian government and the Central Bank of Nigeria have been pivotal in alleviating these challenges. Walsh lauded these efforts, saying, “We commend the new Nigerian government and the Central Bank of Nigeria for their efforts to resolve this issue. 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.”
The clearance of blocked funds represents a significant step toward stabilizing the operational capabilities of airlines in affected regions, thereby supporting broader economic stability and connectivity. The ongoing challenges highlight the delicate balance governments must maintain between national economic policy and international commercial obligations.