Ethiopian Airlines has dominated aviation headlines over the past month following a series of major moves. Most notably, the carrier has secured a path forward for its USD10 billion mega-airport in Bishoftu—a project designed to eclipse all others in Africa. Alongside this expansion, the airline signed a 27.8-billion-birr loan agreement with the Commercial Bank of Ethiopia on December 23, 2025, to finance a housing project for 5,000 employees.
However, the month also brought operational setbacks. Heavy fog forced the airline to suspend several domestic flights—a rare disruption for Ethiopia’s usually clear aviation weather. Beyond these local issues, the carrier is still caught in the global crisis of blocked funds.
The latest report by the International Air Transport Association (IATA) released on 10 December 2025 revealed that USD1.2 billion in airline revenues remain blocked globally, with Africa and the Middle East accounting for the overwhelming majority of the total.
RELATED POSTS
Ethiopia is among a group of countries identified by the report as holding millions of dollars in blocked airline funds, revenues earned by airlines that cannot be repatriated due to foreign exchange and regulatory restrictions.
Blocked airline funds refer to money that airlines earn in a foreign country through ticket sales, cargo operations and other commercial activities but are unable to convert into hard currency or transfer back to their home markets. These restrictions are typically the result of foreign exchange controls, regulatory bottlenecks, central bank approvals and shortages of US dollars. IATA has warned that when such restrictions persist, airlines face growing difficulties in meeting basic operating costs such as fuel purchases, aircraft leasing, maintenance payments and staff salaries.
Airlines normally earn their revenue in local currencies but most of their major obligations are denominated in US dollars. When they are unable to access their funds, even profitable carriers can face liquidity strain. IATA says this problem affects route planning, network expansion and overall financial stability in an industry that already operates on narrow margins.
According to IATA, 1.2 billion dollars of airline funds were blocked from repatriation by governments as of the end of October 2025. This represents a modest improvement of around 100 million dollars compared with the level recorded in April 2025.
The IATA, which represents more than 360 carriers accounting for over 80 percent of global air traffic, has repeatedly stated that access to revenue is a fundamental obligation under bilateral air service agreements between states. It has called on governments to remove restrictions that prevent airlines from converting and transferring their earnings in line with international norms.
Africa and the Middle East account for approximately 93 percent of all blocked airline funds globally. Of the 1.2 billion dollars recorded by IATA, about 1.12 billion dollars is tied up in 26 countries across these two regions. Within this group, ten countries are responsible for nearly 89 percent of the total. They include Algeria, the Central African franc zone, Lebanon, Mozambique, Angola, Eritrea, Zimbabwe, Ethiopia, Pakistan and Bangladesh.
Ethiopia’s blocked airline funds were estimated at 54 million dollars in the December 2025 IATA report. While this is lower than figures recorded in several other countries, it is still significant given the size and importance of Ethiopian Airlines, which is Africa’s largest carrier and one of the continent’s biggest sources of international connectivity and foreign currency earnings.
IATA data shows that global blocked airline funds were even higher in previous years. As of October 2024, the total stood at around 1.7 billion dollars, reflecting widespread foreign exchange shortages following the Covid 19 pandemic and rising pressure on national currencies. Since then, some countries including Nigeria and Bangladesh have reduced their blocked balances after clearing backlogs and introducing special repatriation mechanisms, contributing to the overall decline in the global figure.
Despite these improvements, the situation remains acute across much of Africa where foreign exchange scarcity, trade imbalances and currency controls continue to limit access to dollars. IATA has warned that these conditions undermine the sustainability of air services in affected markets and can lead airlines to reduce capacity or suspend routes altogether.
For Ethiopian Airlines, the issue of blocked funds is not limited to the IATA figures. The carrier has also faced specific disputes in foreign markets that have prevented it from accessing its earnings. In September 2024, Ethiopian Airlines suspended its flights to Asmara after Eritrean authorities froze the airline’s bank account in the country, blocking its access to revenue generated from operations there. The airline said it could no longer operate under such conditions, although it continues to use Eritrean airspace for overflights.
In some cases, governments and companies have sought alternative ways to unlock blocked funds. One of the most notable involved Ethiopia and Nigeria, which entered into a currency swap arrangement in 2023 to address the growing stock of trapped airline and corporate revenues in both countries. Under the deal, the central banks of Ethiopia and Nigeria agreed to swap 100 million dollars of blocked funds belonging to Ethiopian Airlines in Nigeria with an equivalent amount of Nigerian corporate earnings trapped in Ethiopia, including revenues from Dangote Cement.
The arrangement allowed Ethiopian Airlines to access part of its Nigerian revenue, while Nigeria gained access to funds held in Ethiopian banks. At the time, Ethiopian Airlines was the largest foreign carrier operating in Nigeria, with extensive services linking Lagos, Abuja and Kano to its Addis Ababa hub.
IATA has also launched a dedicated Currency Center, an online platform that allows airlines to track blocked funds and foreign exchange conditions across markets in real time. The tool is designed to support negotiations with governments and to improve transparency around the scale of the problem.
Experts observe that the persistence of blocked airline funds in Ethiopia and across Africa reflects deeper macroeconomic pressures, including trade deficits, limited foreign investment inflows and rising demand for hard currency. While the country has embarked on a series of economic reforms aimed at improving forex availability and liberalizing the financial system, airlines remain exposed to regulatory and liquidity constraints that restrict their access to earnings.
For a country that positions aviation as a strategic sector and a key source of export revenue, the issue has broader implications. Ethiopian Airlines plays a central role in supporting tourism, trade, cargo logistics and regional integration. When airline revenues are blocked, the impact extends beyond the carrier itself to the wider economy that depends on air connectivity.
As global aviation continues to recover and expand, IATA has warned that unresolved blocked funds risk undermining that recovery in some of the world’s fastest growing markets. The association has called for urgent cooperation between governments, central banks and airlines to ensure that revenues can be transferred in a predictable and transparent manner.
Whether through innovative currency swaps or broader macroeconomic reforms, resolving the crisis of blocked funds is no longer merely a matter of balance sheets. It is a prerequisite for ensuring that Africa’s most ambitious aviation dreams can truly take flight.
