RAWALPINDI: Pakistan has blocked some $225 million of airlines’ dues, becoming one of the top countries restricting the industry from repatriating funds, the global airline association IATA said on Wednesday.
Pakistan already became a “blocked fund” country in April along with Sri Lanka. The two countries were being monitored and flagged in IATA’s “watch list countries” in 2021.
The amount of airline funds for repatriation being blocked by governments has risen by more than 25 per cent, or $394m, in the last six months to nearly $2 billion now, the International Air Transport Association (IATA), which represents some 300 airlines comprising 83pc of global air traffic, said in a statement on Wednesday.
More than 27 countries and territories are blocking airlines from repatriation funds. Nigeria is on the top with $551m in blocked funds, followed by Pakistan ($225m), Bangladesh ($208m), Lebanon ($144m), and Algeria $140m.
These markets don’t include Venezuela, which has been alone sitting on some $3.8bn of airline funds since 2016, when the country last authorised limited repatriation.
IATA called on governments to “remove all barriers to airlines 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.
“No business can sustain providing service if they cannot get paid and this is no different for airlines. 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 said.
In an update issued in September, IATA said the industry’s blocked funds had jumped 27pc in the last six months, reaching $1.851bn.
“The total amount blocked is higher mainly driven by two factors: increase of sales across most markets and deterioration in Nigeria, Pakistan, Egypt, Russia and Ukraine and two new countries,” the association said at the time.
Published in Dawn, December 9th, 2022