Blocked funds total falls to US$1.8 billion - IATA

BTN News
Tuesday, 04 June 2024

The International Air Transport Association (IATA) says there's been a 28 per cent decrease in the amount of global airline funds blocked from repatriation by governments world wide.

 

The total was approximately US$1.8 billion in April, a reduction of US$708 million since December 2023.  
 
IATA wants 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 US$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 prerequisite for airlines — which 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. 
 
There has been a significant clearance of funds blocked in Nigeria and Egypt, though in both cases, airlines were adversely affected by the devaluation of the Egyptian pound and the Nigerian naira. 
 
"We commend the new Nigerian government and the Central Bank of Nigeria for their efforts to resolve this issue. Individual Nigerians and the economy will benefit from reliable air connectivity for which access to revenues is critical. We are on the right path and urge the government to clear the remaining US$19 million and continue prioritising aviation," said Walsh.  
 
Eight countries are responsible for 87 per cent of blocked funds amounting to US$1.6 billion.  
  Country                            Amount US$ Million         Months Held  
  Pakistan                                                 411               40  
  Bangladesh                                            320               40  
  Algeria                                                    286               37  
  XAF Zone                                               151               50  
  Ethiopia                                                  149               58  
  Lebanon                                                 129               52  
  Eritrea                                                       75             116  
  Zimbabwe                                                 69               84  

The situation has become severe in Pakistan and Bangladesh, with airlines unable to repatriate US$731 million (US$411 million in Pakistan and US$320 million in Bangladesh) of revenues earned in these markets.

"Pakistan and Bangladesh must release the US$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 prioritise 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.

Blocked funds total falls to US$1.8 billion - IATA

BTN News
Tuesday, 04 June 2024

The International Air Transport Association (IATA) says there's been a 28 per cent decrease in the amount of global airline funds blocked from repatriation by governments world wide.

 

The total was approximately US$1.8 billion in April, a reduction of US$708 million since December 2023.  
 
IATA wants 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 US$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 prerequisite for airlines — which 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. 
 
There has been a significant clearance of funds blocked in Nigeria and Egypt, though in both cases, airlines were adversely affected by the devaluation of the Egyptian pound and the Nigerian naira. 
 
"We commend the new Nigerian government and the Central Bank of Nigeria for their efforts to resolve this issue. Individual Nigerians and the economy will benefit from reliable air connectivity for which access to revenues is critical. We are on the right path and urge the government to clear the remaining US$19 million and continue prioritising aviation," said Walsh.  
 
Eight countries are responsible for 87 per cent of blocked funds amounting to US$1.6 billion.  
  Country                            Amount US$ Million         Months Held  
  Pakistan                                                 411               40  
  Bangladesh                                            320               40  
  Algeria                                                    286               37  
  XAF Zone                                               151               50  
  Ethiopia                                                  149               58  
  Lebanon                                                 129               52  
  Eritrea                                                       75             116  
  Zimbabwe                                                 69               84  

The situation has become severe in Pakistan and Bangladesh, with airlines unable to repatriate US$731 million (US$411 million in Pakistan and US$320 million in Bangladesh) of revenues earned in these markets.

"Pakistan and Bangladesh must release the US$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 prioritise 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.