The International Air Transport Association has said that international airlines are facing growing financial pressure as billions of dollars in ticket revenue remain trapped in various countries due to foreign-exchange restrictions.
In an article by the Senior Vice President, External Affairs at IATA, Thomas Reynaert, he warned that the issue of blocked funds poses a serious risk to global air connectivity and economic growth.
“Imagine running a business where you sell your products in certain markets, but access to your revenue was not guaranteed. Would you keep operating there? For many airlines, this isn’t hypothetical; it’s a reality,” Reynaert said.
He explained that blocked funds refer to revenues earned by international airlines in local currencies that cannot be repatriated into US dollars due to government-imposed restrictions or foreign exchange shortages.
“Despite selling tickets and providing services, millions of dollars in airline revenue remain trapped in countries for extended periods of time. In aviation, this problem is known as blocked funds, and it’s a serious threat to global connectivity and economic growth,” he said.
Reynaert noted that while airlines earn revenues across multiple countries, their major expenses, such as aircraft, maintenance, and personnel costs, are largely centralised at their home bases and paid in US dollars.
“To make this system work, when countries sign air services agreements, they also agree that airlines should be able to repatriate the funds earned from sales in those countries back to their base,” he said, adding that this allows airlines to pay their bills and maintain safe and reliable operations.
However, he said some countries fail to honour these agreements by restricting access to foreign exchange or limiting currency outflows, creating operational challenges for airlines.
“That puts airlines in a very difficult position: it’s hard to sustain operations if you can’t use the revenues you’ve earned to pay the bills,” Reynaert stated.
According to him, as of October 2025, airlines globally had about USD $1.2bn in blocked funds, stressing that timely repatriation in US dollars is critical for meeting dollar-denominated obligations such as leasing, fuel, maintenance, and salaries.
He added that beyond immediate cash flow problems, blocked funds expose airlines to currency depreciation and rising borrowing costs, while also limiting their ability to invest in fleet upgrades, route expansion, and sustainability initiatives.
“This is what we can call the ‘connectivity risk premium’,” Reynaert said, explaining that airlines often respond by reducing flight frequencies, increasing fares, or suspending routes entirely, making affected countries less attractive to serve.
“Nigeria is a case in point. At one stage, blocked funds hit $850m. Economy tickets soared into the thousands of dollars, limiting access both to and from Nigeria. Some airlines suspended flights to Nigeria, while others reduced frequencies or restricted ticket sales,” he said.
Reynaert emphasised that air transport plays a significant role in the global economy.
“Every dollar spent on air transport multiplies across the economy. In 2023, aviation supported 86.5 million jobs globally and contributed $4.1 tn to GDP, 3.9% of the world’s total. It also carried 33% of global trade by value, moving goods worth USD 8 trillion,” he said.
