KARACHI: The International Air Transport Association (IATA) reported on Thursday that Pakistan is among the top markets with blocked funds, as the country is yet to pay $225 million in airline funds for repatriation.
In a press release, the trade association of the world’s airlines revealed that the amount of airline funds for repatriation being blocked by different countries had risen by more than 25 percent ($394 million) in the last six months to a total of $2 billion.
Pakistan was ranked second, in the top five markets (excluding Venezuela) with the withheld funds of $225 million, followed by Nigeria that has blocked up to $551 million. The other countries include Bangladesh ($208 million), Lebanon ($144 million) and Algeria ($140 million).
The IATA called on the governments to remove all barriers faced by the airlines in repatriating their revenues from ticket sales and other activities, in line with international agreements and treaty obligations.
“Preventing airlines from repatriating funds may appear to be an easy way to shore up depleted treasuries, but ultimately the local economy will pay a high price,” said Willie Walsh, IATA’s director general.
Walsh emphasised that no business could sustain providing services if they are not paid.
“Air links are a vital economic catalyst. Enabling the efficient repatriation of revenues is critical for any economy to remain globally connected to markets and supply chains,” he added.
IATA said it was also renewing its calls on Venezuela to settle the $3.8 billion of airline funds that had been blocked from repatriation since 2016 when the last authorisation for limited repatriation of funds was allowed by the Venezuelan government.
Airlines have also restarted efforts to recover the $3.8 billion of un-repatriated airline revenues in Venezuela. There have been no approvals of repatriation of the airline funds since early 2016 and connectivity to Venezuela has dwindled to a handful of airlines selling tickets primarily outside the country, according to the IATA press release.
It added that between 2016 and 2019, (the last normal year before Covid-19) connectivity to/from Venezuela plummeted by 62 percent, and the country was looking to bolster tourism, as part of its Covid-19 economic recovery plan, seeking airlines to restart or expand air services to/from Venezuela.
“Success will be much more likely if Venezuela is able to instil confidence in the market by expeditiously settling past debts and providing concrete assurances that airlines will not face any blockages to future repatriation of funds,” the release stated.
Nigeria ranked first in the recent list with $551 million blocked from repatriation.
According to IATA, repatriation issues in Nigeria arose in March 2020, when the demand for foreign currency in the country outpaced supply and the country’s banks were not able to service currency repatriations.
Despite the challenges, the Nigerian authorities had been engaged with the airlines and were, together with the industry, working to find measures to release the funds available, the trade association said.
“Nigeria is an example of how government-industry engagement can resolve blocked fund issues. Working with the Nigerian House of Representatives, central bank and the minister of aviation resulted in the release of $120 million for repatriation with the promise of a further release at the end of 2022,” said Kamil Al-Awadhi, thr regional vice president for Africa and the Middle East.
The encouraging progress demonstrates that, even in difficult circumstances, solutions could be found to clear blocked funds and ensure vital connectivity, he elaborated.
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