IATA has reported that US$1,3 billion (R23,2bn) in airline funds are blocked from repatriation by governments as of the end of April. This represents a 25% improvement compared with the US$1,7 billion (R30,4bn) reported for October 2024.
However, Mozambique has climbed to the top of blocked funds countries, withholding US$205m (R3,6bn) from airlines, compared with US$127 million (R2,2bn) in October 2024. Africa and Middle East accounts for 85% of total blocked funds, at US$1,1 billion (R19,6bn) as of the end of April.
IATA urged governments to remove all barriers preventing airlines from the timely repatriation of their revenues from ticket sales and other activities in accordance with international agreements and treaty obligations.
"Ensuring the timely repatriation of revenues is vital for airlines to cover dollar-denominated expenses and maintain their operations. Delays and denials violate bilateral agreements and increase exchange rate risks. Reliable access to revenues is critical for any business, particularly airlines, which operate on very thin margins,” said Willie Walsh, IATA Director General.
The following 10 countries account for 80% of the total blocked funds, amounting to US$1,03 billion (R18,4bn):
- Mozambique – US$205m (R3,6bn)
- XAF Zone (Cameroon, Central African Republic, Chad, Congo, Equatorial Guinea, and Gabon) – US$191m (R3,4bn)
- Algeria – US$178m (R3,1bn)
- Lebanon – US$142m (R2,5bn)
- Bangladesh – US$92m (R1,6bn)
- Angola – US$84m (R1,5bn)
- Pakistan – US$83m (R1,4bn)
- Eritrea – US$76m (R1,3bn)
- Zimbabwe – US$68m (R1,2bn)
- Ethiopia – US$44m (R787,7m)
A huge challenge
Aaron Munetsi, CEO of the Airlines Association of Southern Africa (AASA), said the association’s position was aligned with IATA in that the blocked funds were one of the biggest challenges an airline could face.
“Blocked funds have a direct and immediate adverse impact on any airline's cash flow. Cash flow is the lifeblood of any airline, given the razor-thin margins they are contending with. Our mission is to engage with the authorities in the respective country, in this case Mozambique, and propose solutions for all our member airlines conducting business in that country,” he said.
AASA has proposed the following:
- AASA in conjunction with IATA to engage with the Mozambique authorities to agree on a blocked funds release programme.
- AASA and IATA to ensure that current sales are immediately made available for repatriation by the airlines.
- Mozambique to allow airlines to sell in forex with immediate effect.
- Airlines must be allowed to sell in forex for the equivalent of their blocked funds.
CEO of Airlink, de Villiers Engelbrecht, added that the airline was affected by the blocked funds but was working with IATA and the commercial banks to repatriate it in an orderly manner.
