Ethiopian Airlines has introduced a new policy mandating that international travelers purchase airline tickets in US dollars, effective from July 8, 2024.
This change could significantly impact companies with limited access to dollars, potentially affecting their operations.
Previously, Ethiopia allowed foreign tourists to buy air tickets using the local currency during their visits. Under the updated regulations, all such transactions must now be conducted in dollars.
The inability of airlines to repatriate funds from ticket sales in Ethiopia has been identified as a barrier to the country’s economic growth and recovery.
As of June 2024, Ethiopia has had $115 million in airline funds blocked from repatriation, ranking it third highest among African nations. This figure constitutes more than 13% of the total $880 million in blocked airline funds across the continent.
Kamil Alawadhi, IATA’s Regional Vice President for Africa and the Middle East, highlighted that the issue of blocked funds significantly hampers investment and operational capabilities within Ethiopia’s aviation market.
IATA’s latest industry forecast anticipates that African airlines will achieve profitability in 2024, projecting a collective net profit of $100 million. However, this translates to just 90 cents per passenger, markedly lower than the global average of $6.14 per passenger.
Addressing the issue of blocked funds in Ethiopia and across Africa is therefore an urgent priority.
