Our story today about airlines starting to recoup hundreds of millions of dollars in blocked funds from governments in Africa underscores an interesting dilemma for aviation in developing countries. Nations typically release repatriated funds to airlines based on ticket sales and currency exchange rates. But a drop in oil and other commodity prices has pinched some countries to the point where they have blocked those monies. Forcing the release of the funds has been a big issue for the airlines' global trade group, IATA.
The volatility in some of these countries' economies is a double-edged sword. If airlines refuse to fly routes to these countries, that lack of connectivity hurts their economies further. So airlines don't get paid either way. IATA is making gains, as higher oil prices fatten some countries' coffers. It's not a problem isolated to Africa for airlines. It's simply another sign of how beholden carriers are to swings in the global economy.
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