International Air Transport Association calls for the disbursement of $1.3 billion in airline revenue that is currently being withheld
Hot Off The Press: Aviation Industry's Financial Woes
By now, you've heard it grapevine-style, but let's set the record straight. According to the International Air Transport Association (IATA), a cool $1.3 billion in airline revenues are being held back as of April 2025, with a whopping 85% of that chunk controlled by just ten countries. The IATA is appealing to these governments to crack the whip and return these funds, in line with international agreements and treaty obligations.
Where does this dough come from? It's the greenbacks from ticket sales, cargo services, and other commercial activities paid to airlines in the home countries of those tickets or services. That's right! These payments are not supposed to be held hostage by governments as per existing international accords.
Although there's been a bit of a reduction compared to October 2024 when the blocked amount was a staggering $1.7 billion, the IATA is still sounding the alarm. The continuous restrictions are causing an unprecedented financial strain on the already cash-strapped industry.
In his statement, IATA's CEO, Willie Walsh, underscored the importance of accessible revenues for any business, particularly airlines that operate on razor-thin margins.
Which countries are playing bad host?
As of April 2025, the following 15 countries are holding on to a significant chunk of these funds:
- Mozambique: $205 million
- Algeria: $178 million
- Lebanon: $142 million (previously among the top 5 but has made partial repayments)
- Bangladesh (previously among the top 5 but has made partial repayments): $92 million
- Angola: $84 million
- Pakistan: $83 million (previously among the top 5 but has made partial repayments)
- Eritrea: $76 million
- Zimbabwe: $68 million
- Ethiopia: $44 million
- The XAF Zone (a monetary union including countries like Cameroon, the Central African Republic, Chad, the Republic of Congo, Equatorial Guinea, and Gabon): $191 million
The XAF Zone is a collection of countries, not a single nation, so it's essential to recognize its constituent parts:
- Cameroon
- Central African Republic
- Chad
- Congo
- Equatorial Guinea
- Gabon
Mozambique, Algeria, Lebanon, Bangladesh, Angola, Pakistan, Eritrea, Zimbabwe, Ethiopia, and the XAF Zone make up the unfriendly dozen.
How did we wind up in this mess?
Way back in 2021, Bangladesh, Lebanon, Zimbabwe, and Nigeria accounted for more than 60% of all blocked airline revenues, with Nigeria alone sitting pretty on a mountain of $800 million.
Nigeria has since turned the tide. Following a change of leadership at the Central Bank of Nigeria, the country has put into place measures to liberalize the foreign exchange market and stabilize its currency. And guess what? The clearance of much of the country's backlog followed.
When these issues began to surface, IATA had already raised concerns, pointing out the additional burden caused by the COVID-19 pandemic on airlines.
Why the cold shoulder?
The reasons vary but are typically tied to economic or political instability. They range from currency shortages hindering conversion and transfer to balance of payment crises, exchange rate restrictions, or sometimes as political leverage in trade or diplomatic disputes.
The most prevalent reason appears to be stringent exchange control measures that keep airlines from repatriating their moolah. And as IATA's man in charge, Willie Walsh, warned, these measures can lead to severe financial troubles for airlines while "delays and denials violate bilateral agreements and increase exchange rate risks."
Why should you care?
Blocking the movement of cash can result in reduced flight frequency, suspended routes, and pricier tickets. So, it may be necessary to turn up the heat on industry stakeholders, diplomatic channels, or legal arbitration, as is currently being done with IATA's current campaign.
As Walsh puts it, "Prompt repatriation of revenues is mission-critical for airlines to cover their dollar-denominated expenses and maintain their operations. An economy's connectivity and jobs depend on it. Governments must understand that airlines face an uphill battle to maintain connectivity when revenue repatriation is negated or delayed."
- The unfriendly dozen, consisting of Mozambique, Algeria, Lebanon, Bangladesh, Angola, Pakistan, Eritrea, Zimbabwe, Ethiopia, and the XAF Zone (which includes Cameroon, Central African Republic, Chad, the Republic of Congo, Equatorial Guinea, and Gabon), are withholding significant amounts of airline revenues, causing financial strain to the aviation industry.
- The continuous restrictions on the repatriation of revenues by these countries are leading to severe financial troubles for airlines, potentially resulting in reduced flight frequency, suspended routes, and pricier tickets, thereby negatively impacting an economy's connectivity and job market.
