The hidden cost of blocked funds
Blocked funds trap airline revenues in local currencies, creating financial, operational, and economic risks while highlighting the urgent need for governments and airlines to act collaboratively.
Imagine running a business where you sell products but cannot access your revenue. For many airlines, this is not hypothetical – it is reality. Despite selling tickets and providing services, millions of dollars in airline revenue remain trapped in certain countries for extended periods. In aviation, this is known as blocked funds, and it poses a serious threat to global connectivity and economic growth.Blocked funds are revenues earned in local currencies that cannot be repatriated in US dollars due to government restrictions or foreign exchange shortages. Airlines rely on repatriating these revenues to pay key expenses - aircraft leases, fuel, maintenance, and salaries - all of which are largely dollar-denominated.
Without access to these funds, operations become difficult to sustain.
As of October 2025, US$1.2 billion in blocked funds were reported globally.
The consequences go beyond cash flow: trapped funds expose airlines to currency depreciation, force borrowing at rising interest rates, and limit investments in fleet upgrades, route expansion, or sustainability initiatives. This creates a ‘connectivity risk premium,’ increasing costs, reducing flight frequencies, or even causing route suspensions.
Nigeria illustrates the problem vividly: at one point, blocked funds reached US$850 million, leading to soaring fares and suspended flights.
Difficult choices
Blocked funds also present economic trade-offs for governments. Countries with limited foreign exchange must choose between clearing blocked airline revenues or funding essential imports like fuel and medicine. While protecting currency may offer short-term relief, prolonged restrictions weaken investor confidence, deter airlines, and damage a nation’s reputation.
Aviation is not just transport - it is an economic engine, supporting millions of jobs and enabling trade. In 2023, aviation supported 86.5 million jobs, contributed US$4.1 trillion to global GDP, and carried 33% of trade by value.
Solutions exist. Governments can resolve blocked funds through political will, transparent dialogue, and prioritising aviation in foreign exchange allocation. Streamlined administrative processes, enforcement of bilateral air service agreements, and clear regulatory frameworks can speed repatriation.
In the short term, airlines can manage pressures by negotiating competitive exchange rates or using local currency for local expenses like airport fees, ground handling, and catering.
Constructive engagement has proven effective. Nigeria successfully cleared a backlog through phased repatriation. The International Air Transport Association (IATA) continues working with governments, central banks, and airline partners to ensure blocked funds are released responsibly.
Unblocking funds is more than improving cash flow - it safeguards connectivity, protects livelihoods, and unlocks economic potential. For aviation to continue delivering prosperity worldwide, both governments and airlines must act together.
*Thomas Reynaert is IATA’s Senior Vice President of External Affairs.
