IATA has announced that the amount of airline funds
for repatriation being blocked by governments has risen by more
than 25% ($394 million) in the last six months.
With the total amount of funds
being blocked now at close to $2 billion, IATA has called on
governments to remove all barriers for airlines repatriating their
revenues from ticket sales and other activities, in line with
international agreements and treaty obligations.
IATA is
also renewing its calls on Venezuela to settle the $3.8 billion of
airline funds that have been blocked from repatriation since 2016
when the last authorization for limited repatriation of funds was
allowed by the Venezuelan government.
“Preventing airlines from repatriating funds may
appear to be an easy way to shore up depleted treasuries, but
ultimately the local economy will pay a high price,” said Willie
Walsh, IATA’s Director General. “No business can sustain providing
service if they cannot get paid and this is no different for
airlines. Air links are a vital economic catalyst. Enabling the
efficient repatriation of revenues is a critical for any economy
to remain globally connected to markets and supply chains.”
Airline funds are currently being blocked from
repatriation in more than 27 countries and territories.
The top five markets with blocked funds (excluding Venezuela) are:
Nigeria: $551 million; Pakistan: $225 million;
Bangladesh: $208 million; Lebanon: $144 million; and
Algeria: $140 million.
Total airline
funds blocked from repatriation in Nigeria currently amount to $551 million.
Repatriation issues arose in March 2020 when demand for foreign
currency in the country outpaced supply and the country’s banks
were not able to service currency repatriations.
Despite
these challenges Nigerian authorities have been engaged with the
airlines and are, together with the industry, working to find
measures to release the funds available.
Kamil Al-Awadhi as Regional Vice President for
Africa and the Middle East, said, “Nigeria is an example of how
government-industry engagement can resolve blocked funds issues.
Working with the Nigerian House of Representatives, Central Bank
and the Minister of Aviation resulted in the release of $120
million for repatriation with the promise of a further release at
the end of 2022. This encouraging progress demonstrates that, even
in difficult circumstances, solutions can be found to clear
blocked funds and ensure vital connectivity.”
While airlines have also restarted
efforts to recover the $3.8 billion of unrepatriated airline
revenues in Venezuela, there have been no approvals of
repatriation of the funds since early 2016 and
connectivity to Venezuela has dwindled to a handful of airlines
selling tickets primarily outside the country. In fact, between
2016 and 2019 (the last normal year before COVID19) connectivity
to/from Venezuela plummeted by 62%.
Venezuela is now looking to
bolster tourism as part of its COVID19 economic recovery plan and
is seeking airlines to restart or expand air services to/from
Venezuela.
Success will, of course, be much more likely if Venezuela is able
to instill confidence in the market by expeditiously settling past
debts and providing concrete assurances that airlines will not
face any blockages to future repatriation of funds.
