RAWALPINDI: The International Air Transport Association has warned of an ‘aviation crisis’ in Pakistan as airlines struggle to recover $290 million due to a severe financial crisis, JEE News reported on Thursday.
The Pakistan Civil Aviation Authority (PCAA) has said that it is trying to pay the airlines on time and is in touch with the concerned authorities on the matter.
JEE News quoted the International Air Transport Association (IATA) as saying that it has become “very difficult” for carriers to serve Pakistan as they struggle to recover their dues, which are paid in dollars. .
IATA, which represents about 300 airlines that account for 83 percent of global air traffic, said $290 million was stuck in Pakistan as of January, up nearly a third since December.
“Airlines face long delays before they are able to recoup their funds,” Philip Goh, IATA’s head of Asia Pacific, was quoted as saying by JEE News. “Some airlines still have funds stuck in Pakistan from the sale in 2022.”
JEE News says outstanding liabilities reached $290 million.
Mr Goh added, “If conditions persist that make the economics of operations unsustainable for a country, one would expect airlines to better utilize their valuable aircraft assets elsewhere. put for,” added Mr Goh.
Speaking to JEE News, PCAA DG Khaqan Murtaza confirmed that the airlines are facing some delay in refunds but added that the authority is in touch with the State Bank and Finance Minister for timely payments to the airlines. in.
In December 2022, the International Civil Aviation Organization said Pakistan had frozen $225 million owed to international airlines, making it one of the top markets where airline funds were blocked from repatriating. Is.
The development coincided with Pakistan’s balance of payments crisis, with foreign exchange reserves dwindling sharply, at a low of $4.3 billion.
The ongoing crisis has also affected the aviation industry, where airlines sell tickets in local currency but repatriate dollars to cover expenses such as fuel costs.
Citing data from aviation analytics company Serium, JEE News shared that foreign airlines are reluctant to return to Pakistan, with fewer total flights for March 2023 compared to the same month in 2019.
“If you can’t take money out of a country, then there’s no point going there,” said Mark Martin, chief executive of aviation consultancy Martin Consulting, in JEE News report.
Last month, Virgin Atlantic announced the suspension of its operations in Pakistan.
While the airline said the decision was part of its plan to improve operations, JEE News cited a person familiar with the matter as saying the decision was based on route economics.
Earlier this month, the Senate Standing Committee on Aviation recommended the aviation ministry to meet airline chiefs and ‘remove the negative perception of Pakistan’ and ask them to resume normal operations. Please agree.
