The International Air Transport Association (IATA) has reported a significant decrease in airline funds blocked from repatriation by governments. However, approximately $1.8 billion is still held up, with a significant portion blocked in Pakistan and Bangladesh.
According to the latest IATA report, released on June 2, 2024, as of the end of April, the total amount of funds held up amounted to roughly $1.8 billion, marking a decrease of approximately $708 million, which accounts for about 28% since December 2023. The association clarified that the notable decrease was primarily propelled by the substantial release of funds previously blocked in Nigeria and Egypt.
In June 2023, Nigeria experienced a peak in blocked funds totaling $850 million, greatly impacting the country’s airline operations and financial stability. Air carriers encountered challenges repatriating revenues in US dollars, prompting some carriers to scale back operations, with one temporarily halting flights to Nigeria. But by April 2024, 98% of these funds had been successfully cleared.
Now the remaining $19 million is awaiting verification by the Central Bank, pertaining to outstanding forward claims submitted by 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,” Willie Walsh, IATA’s Director General, said.
$731 million stuck in Pakistan and Bangladesh
IATA also reported that the combined blocked funds in eight countries make up 87% of the total, reaching $1.6 billion. The situation has mostly escalated in Pakistan and Bangladesh, as airlines struggle to repatriate $731 million in revenue earned within these regions, with $411 million trapped in Pakistan and $320 million in Bangladesh.
“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,” the IATA’s Director General concluded.
The association has urged countries’ governments to eliminate all obstacles preventing airlines from repatriating revenues from ticket sales and other activities, in line with international agreements and treaty obligations.