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Pakistan blocks $225mn funds of airlines

Pakistan blocks $225mn funds of airlines
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December 08, 2022 (MLN): Pakistan has blocked about $225 million for the airlines due to economic woes, and 27 other countries have also blocked the funds.

Pakistan is amongst five nations in the world that failed to make summers to international airlines.

Other countries, such as Nigeria, Bangladesh, Lebanon, and Algeria have blocked $551mn, $208mn, $144mn, and $140mn, respectively.

“The total amount of airline funds for repatriation being blocked by governments has risen by more than 25% to $394mn in the last six months”, the International Air Transport Association (IATA) reported.

Furthermore, the total funds blocked now tally at close to $2.0 billion, it added.

The IATA urges governments to remove all barriers to airlines repatriating revenue from ticket sales and other activities in accordance with international agreements.

IATA’s Director General Willie Walsh said, “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.

He further added, 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.

In Nigeria, total airline funds blocked from repatriation are $551mn, repatriation issues arose in March 2020 when demand for foreign currency in the country outpaced supply and the country’s banks were not able to service currency repatriations.

Despite these challenges, the Nigerian government has been working with the airlines and the industry to find ways to free up funds.

Regional Vice President for Africa and the Middle East, Kamil Al-Awadhi said, “Nigeria is an example of how government-industry engagement can resolve blocked funds 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”.

This encouraging progress demonstrates that, even in difficult circumstances, solutions can be found to clear blocked funds and ensure vital connectivity, he added.

IATA is also renewing its calls on Venezuela to settle the $3.8 billion of airline funds that have been blocked from repatriation since 2016. This is because the last authorization for limited repatriation of funds was approved by the Venezuelan government.

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Posted on: 2022-12-08T11:26:54+05:00

 

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