IATA: $1.3 Billion in Airline Funds Blocked by Governments

IATA logo (Asharq Al-Awsat) 
IATA logo (Asharq Al-Awsat) 
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IATA: $1.3 Billion in Airline Funds Blocked by Governments

IATA logo (Asharq Al-Awsat) 
IATA logo (Asharq Al-Awsat) 

The International Air Transport Association (IATA) said on Sunday that $1.3 billion in airline funds are blocked from repatriation by governments as of end of April 2025.

“This is a significant amount, although it is an improvement of 25% compared with the $1.7 billion reported for October 2024,” it said in a statement.

The announcement came during the 81st IATA Annual General Meeting (AGM) hosted in New Delhi by one of the largest airlines in India, IndiGo.

At the meeting, airline executives will discuss challenges the sector is facing at the environmental level, in addition to the increased operational costs, driven by factors such as rising fuel prices earlier this year and ongoing disruptions in global supply chains, which have delayed aircraft deliveries and constrained maintenance schedules.

In this regard, IATA urged governments to remove all barriers preventing airlines from the timely repatriation of their revenues from ticket sales and other activities in accordance with international agreements and treaty obligations.

“Ensuring the timely repatriation of revenues is vital for airlines to cover dollar-denominated expenses and maintain their operations,” said Willie Walsh, IATA’s Director General.

He said delays and denials violate bilateral agreements and increase exchange rate risks.

“Reliable access to revenues is critical for any business—particularly airlines which operate on very thin margins. Economies and jobs rely on international connectivity. Governments must realize that it is a challenge for airlines to maintain connectivity when revenue repatriation is denied or delayed,” Walsh added.

Sustainable Aviation Fuel (SAF)

IATA said SAF production is expected to grow to two million tons in 2025, accounting for just 0.7% of airline fuel use.

According to Walsh, while the production increase was encouraging, the relatively small amount will add $4.4 billion globally to aviation's fuel bill.

“The pace of progress in ramping up production and gaining efficiencies to reduce costs must accelerate,” Walsh said in a statement.

IATA said SAF is now heading toward Europe, where the EU and UK mandates kicked in on 1 January 2025.

Unacceptably, it added, the cost of SAF to airlines has now doubled in Europe because of compliance fees that SAF producers or suppliers are charging.

For the expected one million tons of SAF that will be purchased to meet the European mandates in 2025, IATA said the expected cost at current market prices is $1.2 billion.

Also, compliance fees are estimated to add an additional $1.7 billion on top of market prices, an amount that could have abated an additional 3.5 million tons of carbon emissions.

“This highlights the problem with the implementation of mandates before there are sufficient market conditions and before safeguards are in place against unreasonable market practices that raise the cost of decarbonization,” said Walsh.

He noted that raising the cost of the energy transition that is already estimated to be a staggering $4.7 trillion should not be the aim or the result of decarbonization policies.

“Europe needs to realize that its approach is not working and find another way,” he said.

New Agreement

In light of the new challenges, IndiGo announced it has entered an agreement with Air France-KLM, Virgin Atlantic and Delta, to expand its long-haul services to North America, Europe and Britain, the airlines said on Sunday.

IndiGo has an extensive domestic network in India, the world's third-largest air passenger market, and is expanding its international reach.

Once the airline partnership is complete, IndiGo will be able to sell flights under its own name on those operated by its partners out of India, and onward travel from Amsterdam and Manchester, UK, on selected flights to Europe and North America.

IndiGo will start flying to Amsterdam and Manchester from July.

Separately IndiGo said it would convert 30 out of 70 options for Airbus A350 jets into firm orders for new planes.

IndiGo is aiming to grow its fleet to 600 aircraft by 2030, from more than 400 currently, and has been leasing aircraft to tide it over aircraft delivery delays and expand internationally.

It recently said it will lease six Boeing 787 wide-body jets from Norse Atlantic Airways by early next year.

US carrier Delta has not flown to India since the pandemic. CEO Ed Bastian told media at an airline summit in New Delhi that Delta will restart direct services from the United States to India over the next couple of years.

“There's not a more important market in aviation at the present time than in India,” Bastian said.

Delta is planning nonstop flights between Atlanta and Delhi, subject to government approval, a joint statement said.

Aviation Safety

At the annual meeting in New Delhi, aviation safety will also be in focus after a spate of air accidents in Kazakhstan, South Korea and North America over the past six months, and rising concerns about air traffic control systems in the United States.

IATA said in February that accidents and incidents related to conflict zones are a top concern for aviation safety requiring urgent global coordination.

In a related development, IATA said India has reached a major milestone in its aviation journey, rising to become the third-largest market for air travel globally.

In return, heightened tensions between India and Pakistan, have significantly impacted air travel in the region, forcing Indian airlines to take longer, detour routes.

Meanwhile, the aviation sector’s recent rebound in passenger numbers has been encouraging, with strong demand emerging across Europe and Asia.

However, US carriers have faced a more complicated picture, experiencing a downturn in travel demand.

The uncertainty over how the Trump Administration’s trade policies will evolve could hold back critical business decisions that drive economic activity, and with it the demand for air cargo and business travel.

 

 

 



50-Year Contracts Open New Horizons for Real Estate Investment in Saudi Arabia

A neighborhood in the Saudi capital, Riyadh (SPA)
A neighborhood in the Saudi capital, Riyadh (SPA)
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50-Year Contracts Open New Horizons for Real Estate Investment in Saudi Arabia

A neighborhood in the Saudi capital, Riyadh (SPA)
A neighborhood in the Saudi capital, Riyadh (SPA)

Long-term real estate investment models are opening new opportunities for Saudi Arabia's private sector, as the Kingdom seeks to expand partnerships with investors to develop municipal assets and transform them into mixed-use projects.

The approach is expected to enhance the appeal of the real estate market, create investment opportunities spanning decades, and attract domestic and international capital to urban development. It also aims to improve land-use efficiency, maximize the economic value of municipal assets and increase housing supply.

Riyadh Region Municipality, the Ministry of Municipalities and Housing, and the National Center for Privatization & PPP (NCP) announced the launch of the expression of interest, prequalification and proposal submission phases for a joint land investment project in northern Riyadh.

The project involves developing a plot of municipal land under a 50-year partnership with the private sector, marking the municipality's first initiative under this joint investment model.

The private-sector partner will be responsible for designing, constructing, operating and maintaining all project facilities.

Located on Zaid bin Asim Street, the strategically positioned 30,015-square-meter site benefits from flexible urban planning regulations that allow for mixed-use development, including residential, commercial, office and recreational facilities.

The project aims to deliver high-quality developments that meet growing demand, serve local residents and community needs, and strengthen Riyadh's urban infrastructure.

Long-Term Investment Strategies

Offering investment opportunities through contracts extending up to 50 years represents a shift in how Saudi Arabia develops government-owned real estate assets.

The model gives private-sector investors a longer timeframe to develop projects and implement long-term investment strategies, overcoming some of the limitations associated with short- and medium-term contracts.

It also strengthens investors' ability to undertake financial and operational planning, allowing them to recover development costs and generate investment returns over a longer period.

This could make such opportunities more attractive to real estate companies and institutional investors.

The project forms part of Riyadh Region Municipality's strategy to improve the efficiency of municipal asset management, expand private-sector participation in urban development and attract high-value investments.

These efforts are intended to promote sustainable urban development, keep pace with the capital's rapid growth and advance Saudi Vision 2030 objectives, in line with the municipality's ambition to help create a prosperous, sustainable Riyadh with a higher quality of life.

Project Sustainability

Real estate expert Khaled al-Mobid said the launch of a 50-year investment project in Riyadh's Al-Narjis district represents an important step toward enabling the private sector to develop real estate assets and transform them into sustainable projects with substantial economic value.

Speaking to Asharq Al-Awsat, he explained that the extended investment period encourages developers to improve construction quality and services while enhancing the financial viability of projects.

He added that the model could help diversify real estate offerings and increase supply in one of the capital's most expensive neighborhoods.

Al-Mobid said the project's significance lies less in its immediate impact on property prices than in its potential to establish a replicable investment model.

Such a model, he noted, could gradually increase supply, strengthen competition and contribute to greater price stability across Riyadh's real estate market.

Diversifying Real Estate Supply

Real estate developer Ahmed Omar Basoudan said the importance of these contracts extends beyond simply making land available to investors.

They also create opportunities to develop integrated real estate assets combining residential, commercial, office and recreational uses, increasing the economic value of land and improving its utilization.

Speaking to Asharq Al-Awsat, Basoudan explained that bringing design, construction, operation and maintenance together under a single investment framework allows for more integrated developments.

It also creates a stronger link between construction quality, operational efficiency and long-term sustainability.

At the broader market level, he said, the model could help diversify real estate offerings, particularly in major cities experiencing rapid urban expansion and rising demand for residential, commercial and office space.

The participation of new developers and operators could also strengthen competition and improve the quality of projects and services.

Moreover, the approach could create integrated mixed-use urban destinations that meet residents' needs and support economic activity, rather than relying solely on conventional real estate development.

 

Replicating the Model

 

According to Basoudan, the success of this investment model will depend on how effectively contracts are structured, how risks are allocated between government entities and investors, and how clearly development, operation and maintenance obligations are defined.

Equally important, he said, is striking an appropriate balance between investment returns and the public interest.

Basoudan believes extending the model to other municipalities and regions could create an additional channel for attracting domestic and international investment.

It could also strengthen private-sector participation in urban development, in line with Saudi Vision 2030 objectives to diversify the economy and improve the efficiency of government asset management.


Gold Rallies as Dollar, Treasury Yields Soften after US Midterm Results

Gold chips displayed at a state-owned gold retail store in Surabaya, East Java (AFP)
Gold chips displayed at a state-owned gold retail store in Surabaya, East Java (AFP)
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Gold Rallies as Dollar, Treasury Yields Soften after US Midterm Results

Gold chips displayed at a state-owned gold retail store in Surabaya, East Java (AFP)
Gold chips displayed at a state-owned gold retail store in Surabaya, East Java (AFP)

Gold climbed to its highest level in over two weeks on Thursday as the fallout from the US midterm election results rippled through the global financial and oil markets.

Spot gold rose 1.6% to $4,124.89 per ounce by 0752 GMT. It touched $4,146.63 per ounce, its highest level since October 20, earlier in ‌the session.

Bullion ‌climbed about 3.4% on Wednesday, its biggest ‌daily gain ⁠since August 19.

US ⁠gold futures for December delivery climbed 1.5% to $4,135.40, Reuters said.

A weaker dollar and lower Treasury yields have helped gold recover above the key $4,000 level, though holding above that threshold remains crucial for the recovery outlook, said Linh Tran, market analyst at XS.com.

"If investment flows and yield movements continue to provide support, gold could stabilize ⁠above $4,000, also opening up an opportunity for a ‌recovery toward $4,200, followed by $4,400."

Oil prices ‌were slightly higher after earlier falling for a fourth day on ‌expectations that the losses US President Donald Trump's Republican Party ‌suffered in congressional elections this week may reduce the risk of further escalation of the US-Israeli war with Iran.

Lower energy prices ease inflationary pressures, reducing expectations that the central bank will keep interest rates higher ‌for longer, supporting the appeal of non-yielding bullion.

The dollar slid to its lowest in more ⁠than a ⁠month, and 10-year US Treasury yield fell to its lowest since September 10.

A weaker dollar makes greenback-priced bullion more affordable for holders of other currencies.

Market participants now await the US non-farm payrolls report on Friday to further gauge the Federal Reserve's monetary policy outlook.

Meanwhile, Citi has a 0-3 month price target of $4,500 per ounce for gold, the brokerage said on Wednesday, as it sees substantial upside potential if the Strait of Hormuz reopens and the Yemen/Saudi conflict de-escalates.

Among other metals, spot silver rose 0.8% to $52.63 per ounce, platinum gained 1.2% to $1,514.20 and palladium climbed 2.2% to $1,026.83.


Tech Hit by New AI Worries on Positive Day for Most Markets

Hong Kong stocks rallied more than three percent on a broadly healthy day for Asian markets. Leung Man Hei / AFP
Hong Kong stocks rallied more than three percent on a broadly healthy day for Asian markets. Leung Man Hei / AFP
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Tech Hit by New AI Worries on Positive Day for Most Markets

Hong Kong stocks rallied more than three percent on a broadly healthy day for Asian markets. Leung Man Hei / AFP
Hong Kong stocks rallied more than three percent on a broadly healthy day for Asian markets. Leung Man Hei / AFP

Tech firms tumbled Thursday as investors contemplated the outlook for the AI boom after Democrats swept the US midterms, partly on the back of growing anger over the rapid building of data centers across the country.

However, broader markets mostly rallied and oil plunged after Donald Trump's Republicans were dealt a historic defeat that was blamed on high prices, tariffs and the Iran war.

The result stoked hopes he will look to wind down the Middle East conflict, which would help temper inflation and even soften his stance on trade.

But AI-linked firms came under the cosh amid fears for planned data center construction projects as well as renewed scrutiny from newly installed Democrats on Capitol Hill.

The sector had already been in the crosshairs of investors owing to questions about the vast sums pumped into new facilities, R&D and chip development, and when any companies would see a profit.

Charu Chanana at Saxo Markets said the vote was accelerating a reassessment of AI that was already under way.

"A Democratic Congress introduces another layer of uncertainty: regulatory scrutiny," she wrote, adding that the three main risks were more oversight, data center restrictions and capital spending uncertainty.

"The congressional scrutiny could accelerate demands for AI safety standards, independent model evaluations and greater accountability for data center developers," she added.

However, she also said: "This is not the same as an outright anti-AI policy agenda. AI is strategically important for US competitiveness, particularly against China, and there remains considerable bipartisan interest in maintaining American leadership."

Chip firms were hammered in Asia, with South Korea's SK hynix off more than seven percent and Samsung 5.5 percent down.

Tokyo-listed Kioxia dived more than 13 percent and Advantest tanked 14.7 percent, while Tokyo Electron lost more than nine percent and SoftBank 6.8 percent.

US Nasdaq futures fell more than one percent.

Broader markets performed better as investors rotated into other sectors including finance, auto, mining and manufacturing names.

Seoul, the poster child of the AI-led surge in the first half of the year, shed more than five percent, while Taipei lost more than three percent. Tokyo gave up 1.8 percent.

But there were healthy gains in Hong Kong, helped by hopes for an easing of trade tensions between the US and China, with tech titans including Alibaba, JD.com and Tencent leading the way amid a shift into beaten-down regional stocks.

Shanghai, Sydney, Singapore, Wellington, Mumbai, Jakarta and Manila also advanced.

Oil continued to fall after diving more than eight percent Wednesday on the US result amid optimism Trump will seek a deal to end the Iran war, which has been a key driver of the inflation spike that has hammered US consumers.

Hopes were given a boost when Vice President JD Vance said in a social media post that the Republican defeat was due to the unpopularity of the eight-month-old conflict.

The drop in crude prices -- both main contracts are now below $100 for the first time since the start of October -- has also tempered inflation worries and, in turn, Treasury yields, which dipped again Thursday.

The lower cost of borrowing has also been helped by the prospect that gridlock on Capitol Hill would lead to less spending.

That also weighed on the dollar, which held losses against its peers in Asian trade.