- Pakistan is among the top five nations in the world that have blocked airline funds
The International Air Transport Association (IATA), a trade body of global airlines, has warned that rapidly rising levels of blocked funds by countries including Pakistan are a threat to airline connectivity in the affected markets.
IATA, in a press release on Sunday, said Pakistan has blocked $188.2 million of airline funds for repatriation. The association represents some 300 airlines comprising 83% of global air traffic.
As per IATA, Pakistan is among the top five nations in the world that have blocked airline funds. The body said that the top five account for 68% of overall blocked funds.
Other countries on the list are Nigeria, Bangladesh, Algeria, and Lebanon which have blocked $812 million, $214.1 million, $196.3 million, and $141.2 million respectively.
“Airlines cannot continue to offer services in markets where they are unable to repatriate the revenues arising from their commercial activities in those markets,” “ said Willie Walsh, IATA’s Director General.
“Governments need to work with industry to resolve this situation so airlines can continue to provide the connectivity that is vital to driving economic activity and job creation,” he added.
IATA urged governments to abide by international agreements and treaty obligations to enable airlines to repatriate funds arising from the sale of tickets, cargo space, and other activities.
Earlier in March, the IATA had warned that Pakistan had become “very challenging” to serve as carriers were struggling to repatriate dollars, while $290 million remained stuck in the crisis-hit country since January.
Last year in December, IATA had said that Pakistan had blocked $225 million of airline funds for repatriation. Even back then, the country was among the top markets where airline funds had been blocked from repatriation.
While the amount of funds has varied over time, difficulty in repatriating profits stems from a severe dollar crisis in Pakistan that is scrambling to arrange foreign currency inflow.
It is engaged in talks with the International Monetary Fund (IMF) for revival of its bailout programme, stuck at the ninth review since November last year.
Its foreign exchange reserves with the central bank sit at nearly $4.09 billion as of May 26, the latest data available, and not enough to cover a month of imports.