Pakistan asked to release blocked airline revenues

LAHORE: The International Air Transport Association (IATA) has called on Pakistan and Bangladesh to release a combined $731 million in blocked airline revenues, saying funds are critical for maintaining essential air connectivity.

According to IATA, Pakistan and Bangladesh top the list of eight countries holding 87 percent of total blocked airline funds over the past 40 months. Airlines are unable to repatriate $411 million from Pakistan and $320 million from Bangladesh.

“The situation in Bangladesh can be resolved if the Central Bank prioritises aviation’s access to foreign exchange as per international treaty obligations”, said Willie Walsh, IATA Director-General, in a statement. In Pakistan, it’s about finding efficient alternatives to the current system of audit and tax exemption certificates that cause significant processing delays, he said. Other countries holding airline revenues include Algeria, Ethiopia, Lebanon, Eritrea, Zimbabwe and those in the XAF Zone.

Despite severe situation in some countries, IATA reported a 28 percent decrease in the amount of airline funds blocked from repatriation by governments. As of end of April, total blocked funds stood at approximately $1.8 billion, a decrease of $708 million since December 2023, it said.

This reduction was mainly due to significant clearance of funds in Nigeria and Egypt. IATA reiterated its call for governments to eliminate barriers preventing airlines from repatriating their revenues in line with international agreements and treaty obligations.

IATA Director-General said reduction in blocked funds is a positive development. The remaining $1.8 billion is significant and must be urgently addressed, he added.

He said efficient repatriation of airline revenues is guaranteed in bilateral agreements. It is crucial for airlines to provide economically critical connectivity. He said no business can operate long-term without access to its rightfully earned revenues.