Blocked airline funds have fallen by 28% after Nigeria cleared most of its backlog but the issue continues to be acute in several countries, particularly Pakistan and Bangladesh.
Airlines face $1.8 billion in blocked funds today, IATA announced during its AGM in Dubai on 2 June, representing a fall of $708 million from December 2023.
Pakistan is the worst offender, IATA says, with some $411 million blocked, followed by Bangladesh ($320 million) and Algeria ($286 million). Central African Franc-zone countries, Ethiopia, Lebanon, Eritrea and Zimbabwe are also among the eight countries that account for 87% of the blocked funds.
Notably, however, Nigeria’s blocked funds have fallen from around $850 million in June 2023 to $19 million today, IATA says.
“We commend the new Nigerian government and the Central Bank of Nigeria for their efforts to resolve this issue,” says IATA director general Willie Walsh. “Individual Nigerians and the economy will all benefit from reliable air connectivity for which access to revenues is critical.”
Emirates suspended some flights to Nigeria in September 2022 in response to the situation.
The airline association also notes that Egypt has cleared its backlog.
“However, in both cases, airlines were adversely affected by the devaluation of the Egyptian Pound and the Nigerian Naira,” IATA says.
Blocked funds most commonly happen when a country has insufficient foreign currency reserves.
