Airlines’ blocked funds in Bangladesh decrease by $124 million in six months

Bangladesh has seen the amount of blocked funds decrease to $196 million from $320 million in April

TBS Report

10 December, 2024, 07:00 pm

Last modified: 10 December, 2024, 07:00 pm

FILE PHOTO: A passenger plane is seen with the moon behind as it flies over London, Britain, January 4, 2020. REUTERS/Toby Melville

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FILE PHOTO: A passenger plane is seen with the moon behind as it flies over London, Britain, January 4, 2020. REUTERS/Toby Melville

FILE PHOTO: A passenger plane is seen with the moon behind as it flies over London, Britain, January 4, 2020. REUTERS/Toby Melville

There has been a significant reduction of $124 million in airline funds blocked from repatriation in Bangladesh over the last six months, said the International Air Transport Association (IATA).

Bangladesh has seen the amount of blocked funds decrease to $196 million from $320 million in April, read the release, the association said in a press statement issued on Monday (9 December).

However, Bangladesh still stands among the top three countries that account for the majority of the total blocked airline funds globally.

IATA said the central bank needs to continue to prioritise airlines’ access to foreign exchange in line with international obligations.

“Over the last six months, we have seen significant reductions in blocked funds in Pakistan, Bangladesh, Algeria and Ethiopia. Governments must remove all barriers for airlines to repatriate their revenues from ticket sales and other activities in accordance with international agreements and treaty obligations,” said Willie Walsh, IATA’s Director General.

“No country wants to lose aviation connectivity, which drives economic prosperity. But if airlines cannot repatriate their revenues, they cannot be expected to provide a service.

“Economies will suffer if connectivity collapses. So, it is in everyone’s interest, including governments, to ensure that airlines can repatriate their funds smoothly,” said Walsh.

The IATA reported that $1.7 billion in airline funds are blocked from repatriation by governments as of the end of October 2024.

This is a small improvement compared to the $1.8 billion reported at the end of April.

Nine countries account for 83% of the airline industry’s blocked funds, amounting to $1.43 billion.

After the Russia-Ukraine conflict began in February 2022, Bangladesh experienced a significant decrease in its foreign exchange reserves. The reserves dropped from over $40 billion to below $20 billion due to soaring commodity prices, encompassing food, energy, and fertiliser.

Moreover, the Bangladeshi taka depreciated by approximately 40%, sliding from Tk86 per dollar to Tk117 in the aftermath of the war.

The delays in funds repatriation in Bangladesh are mainly due to a shortage of US dollars.

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