IATA Raises Concern as Airlines Struggle to Access Billions in Ticket Revenue Worldwide
- IATA says airlines are facing financial pressure due to blocked ticket revenues in several countries
- Blocked funds occur when airlines cannot repatriate earnings because of foreign exchange restrictions
- As of October 2025, about $1.2 billion in airline revenues remained trapped globally
Oluwatobi Odeyinka is a business editor at Legit.ng, covering energy, the money market, technology and macroeconomic trends in Nigeria.
The International Air Transport Association (IATA) has warned that international airlines are under increasing financial strain as billions of dollars earned from ticket sales remain inaccessible in several countries due to foreign exchange restrictions.
Source: Getty Images
In an article written by IATA’s Senior Vice President for External Affairs, Thomas Reynaert, the aviation body said the problem of “blocked funds” poses a serious threat to global air connectivity and broader economic growth.
Read also
PayPal begins accepting international naira payment in Nigeria, but Nigerians have moved on
Reynaert explained that blocked funds are revenues earned by airlines in local currencies that cannot be converted or repatriated into US dollars because of government controls or shortages of foreign exchange, PUNCH reported.
Airlines unable to access billions
According to him, airlines continue to sell tickets and operate flights in affected markets, but are unable to access the income generated for long periods, creating significant operational challenges.
He noted that while airlines earn revenue across different countries, most of their major expenses, including aircraft leasing, maintenance, fuel and staff costs, are paid in US dollars and are largely centralised at their home bases.
Reynaert said international air services agreements typically guarantee airlines the right to repatriate revenues from ticket sales, allowing them to meet financial obligations and maintain safe and reliable operations.
However, he added that some countries fail to honour these agreements by restricting currency outflows or limiting access to foreign exchange, putting airlines in a difficult position.
“That makes it hard to sustain operations when airlines cannot use the revenues they have earned to pay their bills,” Reynaert wrote.
He disclosed that as of October 2025, airlines worldwide had about $1.2 billion in blocked funds, stressing that timely repatriation in US dollars is essential for meeting dollar-denominated obligations.
Beyond cash flow pressures, Reynaert said blocked funds expose airlines to currency depreciation and higher borrowing costs, while also reducing their capacity to invest in new aircraft, expand routes and support sustainability initiatives.
Source: Getty Images
Global connectivity threatened
He described this situation as a “connectivity risk premium,” explaining that airlines often respond by cutting flight frequencies, raising fares or suspending routes altogether.
Using Nigeria as an example, Reynaert recalled that blocked airline funds in the country once rose to about $850 million, leading to a sharp increase in airfares and reduced flight options as some airlines suspended or scaled back operations.
He also highlighted the wider economic importance of aviation, noting that air transport plays a critical role in global trade and employment.
According to him, aviation supported 86.5 million jobs worldwide in 2023 and contributed $4.1 trillion to global GDP, representing about 3.9% of the world’s total economic output.
Domestic air traffic drops in Nigeria
Legit.ng earlier reported that in January 2026, Nigeria's domestic air travel dropped by 13.6%, reaching a three-year low of 12.54 million passengers. This is according to data released by the Federal Airports Authority of Nigeria (FAAN).
In contrast, international passenger traffic rose steadily in the same period, increasing 15.5% from 2022 to 2024 amid local challenges.
Experts warn that high costs and poor service threaten domestic airlines' recovery as road travel gains popularity.
Source: Legit.ng
