The International Air Transport Association (IATA) has issued a warning about the escalating levels of blocked funds, emphasizing that this growing concern poses a threat to airline connectivity in affected markets. According to recent data, the industry’s blocked funds have surged by 47%, reaching $2.27 billion in April 2023, compared to $1.55 billion in the same month of the previous year.
The substantial increase in blocked funds has raised alarms within the aviation industry, prompting IATA to call for immediate action. Willie Walsh, the Director General of IATA, stressed the urgency of resolving this situation to safeguard the continuity of airline operations and the vital connectivity they provide.
“Airlines cannot continue to offer services in markets where they are unable to repatriate the revenues arising from their commercial activities in those markets,” stated Walsh. He further emphasized the need for governments to collaborate with the industry to find solutions, ensuring that airlines can repatriate their earnings. This, in turn, allows airlines to sustain connectivity, a critical driver of economic activity and job creation.
According to IATA’s findings, the top five countries account for a significant 68.0% of the blocked funds. These countries include Nigeria with $812.2 million, Bangladesh with $214.1 million, Algeria with $196.3 million, Pakistan with $188.2 million, and Lebanon with $141.2 million. The high concentration of blocked funds in these nations highlights the urgency for governments to take immediate action to resolve the issue.
IATA has urged governments to uphold their international agreements and treaty obligations, enabling airlines to repatriate funds that arise from the sale of tickets, cargo space, and other aviation-related activities. By honoring these obligations, governments can play a crucial role in ensuring the stability and continuity of air transport operations.
The consequences of blocked funds extend beyond the airlines themselves. Disruptions to airline connectivity can have far-reaching effects on various industries, hindering trade, tourism, and economic growth. It is crucial for governments to understand the impact and take proactive measures to address the issue promptly.
As the industry’s leading global trade association, IATA continues to advocate for the interests of airlines worldwide. Through its call for action to resolve the escalating blocked funds situation, IATA aims to foster collaboration between governments and the aviation sector, facilitating the smooth repatriation of funds and preserving vital airline connectivity.
Efforts to resolve the blocked funds issue are imperative not only for the financial health of airlines but also for the overall socio-economic well-being of the affected markets. It is essential that governments act swiftly and in accordance with international agreements to protect airline connectivity and support the recovery of the aviation industry as a whole