Staff Writer
The International Air Transport Association (IATA) says governments are blocking US$1.2 billion in airline funds from repatriation as of the end of October.
The figure shows a small improvement of US$100 million since April, but 93% of the trapped funds remain in Africa and the Middle East.
IATA has urged governments to remove all restrictions on currency repatriation and allow airlines access to their revenues in US dollars. These revenues come from ticket sales, cargo sales and other activities and are protected under bilateral air service agreements and treaty commitments. Restrictions affecting airlines include delays in approval, inconsistent procedures, shortages of foreign exchange and limits imposed by authorities.
“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.
Ten countries across Africa, the Middle East, and South Asia account for 89% of the blocked funds, totalling US$1.08 billion. These countries include Algeria, Lebanon, Mozambique, Angola, Eritrea, Zimbabwe, Ethiopia, Pakistan and Bangladesh.
Algeria is now at the top of the list after reporting significant increases linked to a new approval requirement from the Ministry of Trade, adding to already heavy documentation demands. IATA has urged the Algerian government to remove unnecessary processes.
Blocked funds in the XAF Zone—Cameroon, the Central African Republic, Chad, the Republic of the Congo, Equatorial Guinea, and Gabon—have slightly decreased from US$191 million in April, but airlines still face challenges securing approvals despite filing the required documents.
“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.
