Governments blocked US$1.7 billion in airline funds
The International Air Transport Association (IATA) reports several governments have blocked up to $1.7 billion in airline funds from repatriation as of the end of October 2024.
The Association states that this is a small improvement compared to the $1.8 billion reported at the end of April.
According to IATA director general Willie Walsh, there has been a significant reduction in blocked funds in Pakistan, Bangladesh, Algeria, and Ethiopia. However, it was also noted that amounts are rising in the XAF/XOF zones and Mozambique.
Bolivia is also emerging as a problem zone as repatriating sales revenues is becoming increasingly difficult and unsustainable for airlines.
Walsh remarked that these actions were unacceptable, and that 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.
Walsh said: “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.”
Problem zones as of 31st October 2024
At present, nine countries account for 83 percent of the global airline industry’s blocked funds, amounting to $1.43 billion.
Pakistan continues to top the list of blocked funds countries at $311 million. This is an improvement from $411 million 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 $196 million (from $320 million in April). The Central Bank needs to continue to prioritize airlines’ access to foreign exchange in line with international treaty obligations.
About $1 billion of airline money blocked from repatriation is in African countries. That is about 59 percent of the global tally. Over the last six months, there were significant reductions in blocked funds in Algeria ($193 million from $286 million April) and Ethiopia ($43 million from $149 million in April). At the same time, XAF Zone (+$84 million), Mozambique (+$84 million) and XOF Zone (+$73 million) contributed to the largest increases.
Bolivia is new to the list of blocked fund countries. A further deterioration in the availability of foreign exchange, particularly the US dollar, has resulted in an estimated $42 million in airline funds being blocked in the country.