The International Air Transport Association has warned that international airlines are under increasing financial strain as billions of dollars in ticket revenues remain trapped in several countries because of foreign exchange restrictions.

In an article by IATA’s Senior Vice President for External Affairs, Thomas Reynaert cautioned that the growing backlog of blocked funds threatens global air connectivity and broader economic growth.

“Imagine running a business where you sell your products in certain markets, but access to your revenue was not guaranteed. Would you keep operating there? For many airlines, this isn’t hypothetical; it’s a reality,” Reynaert said.

He noted that blocked funds are revenues generated by international airlines in local currencies but held back from conversion into U.S. dollars because of government restrictions or foreign exchange shortages.

“Despite selling tickets and providing services, millions of dollars in airline revenue remain trapped in countries for extended periods of time. In aviation, this problem is known as blocked funds, and it’s a serious threat to global connectivity and economic growth,” he said.

Reynaert explained that while airlines earn income across different markets, the bulk of their operating expenses — such as aircraft acquisition, maintenance, and staffing — are centralised at headquarters and paid in U.S. dollars.

“To make this system work, when countries sign air services agreements, they also agree that airlines should be able to repatriate the funds earned from sales in those countries back to their base,” he said.

However, he noted that some countries do not uphold these agreements, instead restricting access to foreign exchange or limiting currency transfers, which creates operational difficulties for airlines.

“That puts airlines in a very difficult position: it’s hard to sustain operations if you can’t use the revenues you’ve earned to pay the bills,” Reynaert added.

Reynaert said that as of October 2025, airlines globally had roughly $1.2 billion in trapped funds, noting that swift repatriation in U.S. dollars is vital to meet obligations such as aircraft leases, fuel costs, maintenance, and staff salaries.

He added that beyond immediate liquidity challenges, blocked funds increase exposure to currency depreciation and borrowing costs, while also restricting investment in fleet upgrades, network growth, and sustainability projects.

“This is what we can call the ‘connectivity risk premium’,” Reynaert said, explaining that airlines often respond by reducing flight frequencies, increasing fares, or suspending routes entirely, making affected countries less attractive to serve.

“Nigeria is a case in point. At one stage, blocked funds hit $850m. Economy tickets soared into the thousands of dollars, limiting access both to and from Nigeria. Some airlines suspended flights to Nigeria, while others reduced frequencies or restricted ticket sales,” he said.

Reynaert highlighted the importance of air transport to the global economy.