The International Air Transport Association has urged countries, including Pakistan, to allow airlines to repatriate their profits, warning that “rapidly rising levels of blocked funds pose a threat to airline connectivity”.
The International Air Transport Association (IATA) said in a statement on Sunday that the industry’s blocked funds rose 47 percent to $2.27 billion in April 2023 from $1.55 billion in the same month last year.
“Airlines cannot continue to offer services to markets where they are unable to repatriate revenues from their commercial activities in those markets,” IATA added.
Airline Association director-general Willie Walsh urged governments to work with industry to resolve the situation so airlines can continue to provide the connectivity that will drive economic activity and create jobs. It is necessary for
The top five countries account for 68.0% of blocked funds: Nigeria ($812.2 million), Bangladesh ($214.1 million), Algeria ($196.3 million), Pakistan ($188.2 million) and Lebanon ($141.2 million).
The airline association also urged governments to abide by international treaty and treaty obligations so that airlines can repatriate funds generated from ticket sales, cargo space and other activities.
In March this year, the global airline industry body warned that continuing operations in Pakistan has become “very difficult” as carriers struggle to recoup dollars, leaving foreign companies operating in the crisis-hit country. Difficulties are increasing for
Pakistan is facing a growing financial crisis, with dangerously low foreign reserves leading to food shortages and rising prices.
Companies are experiencing delays in importing or converting currency, and analysts have warned that the country is at risk of default.
Air carriers, which sell tickets in local currency but need to repatriate dollars to pay for expenses such as fuel, have been particularly hard hit.
In February this year, Virgin Atlantic announced its withdrawal from Pakistan, just two years after it began service. According to a person familiar with the decision, the carrier faced difficulties in recovering the funds, but the decision to suspend the flights was based on the economics of the route.
