IATA Warns of Growing Pressure on Airlines Over $1.2bn in Trapped Revenues

The International Air Transport Association has raised an alarm over the mounting financial strain on international airlines, as approximately $1.2 billion in ticket revenue remains trapped in several countries due to foreign exchange restrictions.

In a statement, IATA’s Senior Vice President for External Affairs, Thomas Reynaert, said the issue of “blocked funds”  revenues earned in local currencies that cannot be converted and repatriated into US dollars  threatens 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 stated.

He explained that while airlines sell tickets globally, their major costs such as aircraft leases, maintenance, and salaries are largely dollar-denominated and centralized. When countries restrict access to foreign exchange, airlines struggle to pay these bills, undermining safe and reliable operations

Reynaert highlighted Nigeria as a prominent example, where blocked funds once reached $850 million. This led to skyrocketing ticket prices, reduced flight frequencies, and in some cases, the complete suspension of services to the country.

The IATA official warned that such constraints force airlines to reduce connectivity, increase fares, or withdraw from markets altogether, making affected countries less attractive for air service.

Beyond immediate cash flow problems, blocked funds expose carriers to currency depreciation and higher borrowing costs, limiting their ability to invest in fleet upgrades and route expansion.

Reynaert emphasized aviation’s vital economic role, noting that in 2023, the sector supported 86.5 million jobs worldwide and contributed $4.1 trillion to global GDP, while transporting one-third of all traded goods by value.

The association calls for governments to honour air service agreements that guarantee airlines’ right to repatriate revenues, stressing that timely access to foreign exchange is essential for maintaining global air networks.