Sydney, June 2: Pakistan and Bangladesh have become severe hotspots for blocked airline funds, with carriers unable to repatriate $731 million (56 percent of the total blocked funds) — $411 million in Pakistan and $320 million in Bangladesh — of revenues earned in these markets.
The International Air Transport Association (IATA) has reported a 28 percent decrease in the total amount of airline funds blocked from repatriation by governments, now standing at approximately $1.8 billion, a reduction of $708 million (28 percent) since December 2023.
Despite this progress, the situation in Pakistan and Bangladesh remains critical.
“Pakistan and Bangladesh must release the $731 million in blocked funds immediately to ensure airlines can continue providing essential air connectivity. In Bangladesh, the solution is in the hands of the Central Bank, which must prioritize aviation’s access to foreign exchange in line with international treaty obligations. The solution in Pakistan is finding efficient alternatives to the system of audit and tax exemption certificates, which cause long processing delays,” said Willie Walsh, IATA’s Director General.
Global Context
IATA reiterated the call for governments to remove all barriers to airlines repatriating their revenues from ticket sales and other activities in accordance with international agreements and treaty obligations.
“The reduction in blocked funds is a positive development. The remaining $1.8 billion, however, is significant and must be urgently addressed. The efficient repatriation of airline revenues is guaranteed in bilateral agreements. Even more importantly, it is a prerequisite for airlines—who operate on thin margins—to be able to provide economically critical connectivity. No business can operate long-term without access to rightfully earned revenues,” said Walsh.
Progress in Nigeria
The main driver of the reduction was a significant clearance of funds blocked in Nigeria. At its peak in June 2023, Nigeria’s blocked funds amounted to $850 million. However, as of April 2024, 98 percent of these funds have been cleared. The remaining $19 million is due to the Central Bank’s ongoing verification of outstanding forward claims filed by the commercial banks.
“We commend the new Nigerian government and the Central Bank of Nigeria for their efforts to resolve this issue. Individual Nigerians and the economy will all benefit from reliable air connectivity for which access to revenues is critical. We are on the right path and urge the government to clear the residual $19 million and continue prioritizing aviation,” said Walsh.
Eight Countries Hold 87 Percent of Blocked Funds
Eight countries account for 87 percent of the total blocked funds, amounting to $1.6 billion. The countries and amounts are as follows:
- Pakistan: $411 million (40 months)
- Bangladesh: $320 million (40 months)
- Algeria: $286 million (37 months)
- XAF Zone: $151 million (50 months)
- Ethiopia: $149 million (58 months)
- Lebanon: $129 million (52 months)
- Eritrea: $75 million (116 months)
- Zimbabwe: $69 million (84 months)
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