Ethiopian Airlines Still Unable to Recover Frozen Eritrean Funds

(ASMARA) Ethiopian Airlines remains locked in a dispute over frozen funds in Eritrea and has still not recovered its money, the carrier’s chief executive said, confirming that all court efforts have failed and that the matter now sits squarely in the political arena. The standoff, which has dragged into its second year, has already forced the suspension of all flights to Asmara since September 3, 2024 and continues to disrupt travel for families, businesses, and students that depended on the short but vital link between the two capitals.

CEO Mesfin Tasew, presenting the company’s 2024/2025 results, made clear that Ethiopian Airlines pursued court remedies inside Eritrea but reached a dead end. “We pursued legal measures to recover the money through the courts, but the efforts were unsuccessful. Therefore the issue is a political decision,” he said, underscoring how a routine financial dispute escalated into a diplomatic fight with no quick fix in sight. The airline’s bank account in Eritrea remains inaccessible, and Eritrean authorities have not released the money despite repeated requests.

The core dispute: frozen account and contested claim

At the center is a contested claim and a frozen account. Eritrea’s civil aviation regulator maintains that Ethiopian Airlines owes USD 3 million for alleged unpaid services and lost baggage claims that it says go back more than two decades. Ethiopian Airlines rejects that push, framing the freeze as a politically driven block that courts could not untangle.

With funds still locked and no movement from Eritrea to unfreeze the account, the airline grounded its Asmara operations on September 3, 2024, citing “very difficult operating conditions.” That suspension wiped out a daily Boeing 737-8 service that had symbolized a rare period of thaw between the neighbors after Ethiopian Airlines reopened the route in 2018 following nearly 20 years of silence caused by a border war.

The link was more than a flight; it was a bridge for families split across borders, a channel for small trade, and a line for diaspora visits that had just started to feel normal again. Ending it abruptly reversed those gains.

Financial and operational context

Ethiopian Airlines reported record revenue of USD 7.6 billion in the fiscal year ending June 30, 2025—an 8% rise year-on-year—while absorbing a USD 28 million loss in domestic operations due to currency devaluation and higher costs. The Eritrea freeze adds another layer of strain by tying up cash with no timeline for release.

Operationally, the carrier had to reshuffle assets after it cut the route:

• 737-8 jets used on the short run were reassigned.
• Scheduling teams reworked crew and maintenance plans.
• Domestic pricing was tweaked to absorb rising costs.

Those moves helped the airline keep its network stable, but they did not solve the problem in Eritrea, where cash remains tied up and unusable.

Legal efforts exhausted; politics now central

What began as a commercial row picked up speed in early 2024, when Ethiopian Airlines first flagged trouble accessing funds held in Eritrea. The situation escalated through the year, cross-border talks failed to break through, and the carrier pulled the plug on the Addis Ababa–Asmara link in early September 2024.

Key points on the legal and diplomatic front:

• Ethiopian Airlines pursued legal action inside Eritrea to unlock the funds—unsuccessful.
• The airline says the legal route is exhausted and that a political solution is required.
• Eritrean Civil Aviation Authority maintains the USD 3 million claim, referencing unpaid charges and baggage liabilities said to date back more than 25 years.

“With no legal remedy left, Ethiopian Airlines has said only political talks can unlock the funds.”

Calls from industry voices for mediation have surfaced, suggesting a third party could help, but that would require both governments to agree. As of August 25, 2025, there has been no public sign of a breakthrough.

Overflight rights vs. landing rights

Despite the halt to Asmara flights, Ethiopian Airlines continues to fly over Eritrean airspace for its international network. Overflight use keeps long-haul routes efficient across Africa, Europe, the Middle East, and Asia.

• This arrangement has held so far, but analysts warn political fights sometimes spill into airspace rules.
• If overflight access were curtailed, the airline would face longer routes, higher fuel burn, and schedule volatility.

The current split—no landing rights but continued overflight rights—shows how diplomatic disputes can produce uneven outcomes across different aviation permissions.

Impact on travelers and regional mobility

For passengers, the end of direct flights to Asmara is more than a route change—it’s a daily life problem.

Affected groups include:

• Families who now piece together longer journeys through third countries or cancel visits.
• Small business owners and traders facing higher costs and fewer options.
• Students navigating extra connections and uncertainty.
• Tour operators and travel agents who can’t market short weekend or family trips.

Consequences observed:

• Sharp drop in bookings tied to the corridor.
• Travelers rerouting via Khartoum or Gulf hubs, increasing fares and travel times.
• Cancelled trips and disrupted life events (weddings, medical visits, graduations).

According to VisaVerge.com, prolonged route cuts on short cross-border corridors hit families, students, and small businesses hardest because they rely on direct, predictable travel.

Practical advice for travelers:

1. Plan extra time for trips involving third-country transits.
2. Monitor airline and embassy updates for flight or airspace changes.
3. Keep records of bookings and receipts for potential claims.
4. Consider flexible tickets when traveling in the region.

U.S. travelers can check the U.S. Department of State’s Eritrea page for the latest guidance: https://travel.state.gov/content/travel/en/traveladvisories/traveladvisories/eritrea-travel-advisory.html

Contacts and airline response

Ethiopian Airlines has kept its contact channels open:

• Ethiopian Airlines Head Office (Addis Ababa): +251 116 179 900 (24/7)
• Mailing Address: P.O. Box 1755, Addis Ababa, Ethiopia
• Asmara Airport Office: [email protected]; +291 153949 (09:00–15:00 on flight days)
• Official website: https://www.ethiopianairlines.com

Steps the airline has taken:

• Legal action inside Eritrea—unsuccessful.
• Diplomatic outreach—no breakthrough to date.
• Operational shifts—suspension of Asmara flights; continued overflight use of Eritrean airspace.

Broader implications and possible outcomes

The case is an example of trapped cash risks in markets with tight financial controls or political sensitivity. Industry watchers note:

• Cases like this can last years.
• Airlines often set aside internal reserves or reduce exposure to risky markets.
• Rebuilding a suspended route requires schedules, crew assignments, airport partnerships, and clear settlement rules to avoid future trapped funds.

Diplomatic settlement would require agreement on numbers, timelines, and legal closure on old baggage issues. Whether that can happen after a year of failed talks is uncertain.

The facts today are straightforward: the money is still locked, legal doors are closed, and the airline says politics must do what courts could not.

Human and community costs

The social toll is visible:

• Families cancel or postpone visits after multiple itinerary changes.
• Small exporters seek slower land routes or alternative hubs.
• Students delay or reroute education plans.
• Local businesses—hotels, restaurants, transport—lose steady customers tied to the route.

The 2018 reopening of the Addis–Asmara route was a symbolic and practical moment of hope. The 2024 suspension underscores how fragile such progress can be when politics intervene.

Final status and next steps

As of August 25, 2025:

• Ethiopian Airlines says legal efforts are exhausted; the issue now requires political action.
• Eritrean authorities continue to hold the USD 3 million claim and maintain the frozen account.
• The airline continues to operate a large global network but without flights to Asmara.
• Overflight rights remain in place, keeping long-haul network efficiencies intact for now.

For travelers and businesses: continue monitoring official channels, prepare for alternate routings, and expect that restoring the route—if a political window opens—will take time and deliberate planning.

Readers interested in immigration and cross-border mobility topics can follow outlets like VisaVerge.com for coverage and practical guidance on visas, route suspensions, and ripple effects on families, students, and small businesses.