The International Air Transport Association (IATA), the leading global association of airlines, says though there is a marginal improvement in airline funds blocked by governments around the world, the sums are still too large for airlines.

In a press statement, IATA says that at the end of October, USD 1.7 billion in repatriable airline funds were blocked from repatriation by governments, compared to the USD 1.8 billion reported at the end of April.

Willie Walsh

“Over the last six months, we have seen significant reductions in blocked funds in Pakistan, Bangladesh, Algeria and Ethiopia. At the same time, amounts are rising in the XAF /XOF  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 in accordance with international agreements and treaty obligations,” says 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,” adds Walsh.

IATA says that nine countries account for 83 pc of the airline industry’s blocked funds, amounting to USD 1.43 billion. It adds that despite improvement, Pakistan continues to top the list of blocked funds countries. It says that while in April, the blocked funds amounted to USD 411 million, by October, the total had declined to USD 311 million. IATA says that the main issue is the system of audit and tax exemption certificates which is causing long processing delays.

Bangladesh, too, has seen the amount of blocked funds decrease to USD 196 million in October from USD 320 million in April. IATA says that the Central Bank of Bangladesh needs to continue to prioritize airlines’ access to foreign exchange in line with international treated obligations.

According to IATA, about USD 1 billion of airline money blocked from repatriation is in African countries. That is about 59 pc of the global tally. Over the last six months, there were significant reductions in blocked funds in Algeria, where it stood at USD 193 million, as against USD 286 million April and Ethiopia, where blocked funds amounted to USD 43 million from USD 149 million in April. At the same time, the funds blocked in Central African region or XAF Zone rose by USD 84 million, in Mozambique also by USD 84 million. In CFA Franc zone or XOF Zone, which brings together former French colonies, the amount blocked rose by USD 73 million, making these three the largest increases in blocked funds.

IATA says that Bolivia is new to the list of blocked fund countries. A further deterioration in the availability of foreign exchange, particular the US Dollar, has resulted in an estimated USD 42 million in airline funds being blocked in the country.