The International Air Transport Association (IATA) has reported a 28 percent decrease in the amount of airline funds blocked from repatriation by governments with total blocked funds at the end of April at approximately $1.8 billion, a reduction of $708 million since December 2023.
The association said that eight countries account for 87 percent of the total blocked funds, amounting to $1.6 billion with funds blocked by Pakistan standing at $411 million followed by Bangladesh at $320 million.
IATA reiterated the call for governments to remove all barriers to airlines repatriating their revenues from ticket sales and other activities in accordance with international agreements and treaty obligations.
“The reduction in blocked funds is a positive development. The remaining $1.8 billion, however, is significant and must be urgently addressed. The efficient repatriation of airline revenues is guaranteed in bilateral agreements. Even more importantly, it is a pre-requisite for airlines—who operate on thin margins—to be able to provide economically critical connectivity. No business can operate long-term without access to rightfully earned revenues,” said Willie Walsh, IATA’s Director General.
The main driver of the reduction was a significant clearance of funds blocked in Nigeria. Egypt also approved the clearance of its significant accumulation of blocked funds. However, in both cases, airlines were adversely affected by the devaluation of the Egyptian Pound and the Nigerian Naira.
The situation has become severe in Pakistan and Bangladesh with airlines unable to repatriate $731 million of revenues earned in these markets.
“Pakistan and Bangladesh must release the $731 million in blocked funds immediately to ensure airlines can continue providing essential air connectivity. In Bangladesh, the solution is in the hands of the Central Bank, which must prioritize aviation’s access to foreign exchange in line with international treaty obligations. The solution in Pakistan is finding efficient alternatives to the system of audit and tax exemption certificates, which cause long processing delays,” said Walsh.
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