Airlines lament $1.7b stuck fund in Pakistan, Algeria, Ethiopia, others — Business — The Guardian Nigeria News – Nigeria and World News

International airlines have bemoaned $1.7 billion stuck in Pakistan, Bangladesh, Algeria, Ethiopia, and others as of the end of October 2024.

The airlines, under the aegis of the International Air Transport Association (IATA), noted that the stuck fund was a slight improvement compared to the $1.8 billion reported at the end of April.

IATA’s Director-General, Willie Walsh, said that over the last six months, blocked funds have been significantly reduced in Pakistan, Bangladesh, Algeria, and Ethiopia.

“At the same time, amounts are rising in the XAF (Cameroon, Central African Republic, Chad, Republic of the Congo, Equatorial Guinea, and Gabon) and XOF (Benin, Burkina Faso, Ivory Coast, Guinea-Bissau, Mali, Niger, Senegal, and Togo) zones and Mozambique.

“Bolivia has also emerged as a problem, where repatriating sales revenues is becoming increasingly difficult and unsustainable for airlines. This unfortunate game of ‘whack-a-mole’ is unacceptable. Governments must remove all barriers for airlines to repatriate their revenues from ticket sales and other activities under international agreements and treaty obligations.

“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,” Walsh said.

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

Pakistan continues to top the list of countries with blocked funds at $311 million. This is an improvement from $411 million in April 2024. The main issue is the audit and tax exemption certificate system, which is causing long processing delays.

Bangladesh has seen blocked funds decrease to $196 million (from $320 million in April). The Central Bank must continue prioritising airlines’ access to foreign exchange in line with international treated obligations.

About $1 billion of airline money blocked from repatriation is in African countries. That is about 59 per cent of the global tally. Over the last six months, there were significant reductions in blocked funds in Algeria ($193 million from $286 million in April) and Ethiopia ($43 million from $149 million in April). At the same time, XAF Zone (+$84 million), Mozambique (+$84 million) and XOF Zone (+$73 million) contributed to the most significant increases.

Bolivia is new to the list of countries with blocked funds. A further deterioration in the availability of foreign exchange, particularly the U.S. dollar, has blocked an estimated $42 million in airline funds in the country.

Leave a Reply

Your email address will not be published. Required fields are marked *