Singapore, April 24: The International Air Transport Association (IATA) has issued a stern call for Pakistan and Bangladesh to release over $720 million in airline revenues that are currently held back, a situation IATA claims violates international agreements. According to IATA, airlines are unable to repatriate $399 million from Pakistan and $323 million from Bangladesh, which is significantly impacting their operational capabilities.
Philip Goh, IATA’s Regional Vice President for Asia-Pacific, emphasized the urgency of the matter, stating, “The timely repatriation of revenues to their home countries is critical for payment of dollar denominated expenses such as lease agreements, spare parts, overflight fees, and fuel. Delaying repatriation contravenes international obligations written into bilateral agreements and increases exchange rate risks for airlines. Pakistan and Bangladesh must release the more than $720 million that they are blocking with immediate effect so that airlines can continue to efficiently provide the air connectivity on which both these economies rely.”
IATA has highlighted specific issues within each country. In Pakistan, the process for repatriation is encumbered by demanding requirements including audit certificates and a tax exemption certificate, which significantly delay the process. Meanwhile, although Bangladesh employs a more standardized process, the need for prioritization of aviation by the Central Bank remains critical to ensure adequate access to foreign exchange.
Goh further stressed the importance of reliable air connectivity for economic growth, “We recognize that governments have a difficult challenge in how foreign currencies are used strategically. Airlines operate on razor-thin margins. They need to prioritize the markets they serve based on the confidence they have in being able to pay their expenses with revenues that are remitted in a timely and efficient fashion. Reduced air connectivity limits the potential for economic growth, foreign investment, and exports. With such large sums of money involved in both markets, urgent solutions are needed.”
The situation presents a complex challenge as both nations struggle with foreign currency allocations, with IATA pushing for immediate resolutions to support continued economic and aviation growth.
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