Pakistan to pay $311 million to IATA in blocked funds
Governments are withholding $1.7 billion in airline funds as of October
2024, jeopardizing global aviation connectivity, according to the International
Air Transport Association (IATA). While this represents a slight improvement
from $1.8 billion in April, the issue remains critical as airlines face
challenges in accessing revenue from ticket sales and operations.
Nine countries, including Pakistan, Bangladesh, and several African nations,
account for 83% of the blocked funds, totaling $1.43 billion. Pakistan alone is
responsible for $311 million, down from $411 million in April. IATA attributed
Pakistan’s delays to its cumbersome system for issuing audit and tax exemption
certificates.
Read More Pakistan
facing a threat to airline connectivity due to blocked funds: IATA
IATA Director General Willie Walsh urged governments to honor their treaty
obligations and facilitate the repatriation of airline funds. He warned that
continued delays risk damaging local economies and disrupting aviation
services.
“No country wants to lose aviation connectivity, which drives economic
prosperity. But if airlines cannot access their revenue, they cannot sustain
operations. Economies will suffer if connectivity collapses,” Mr. Walsh said.
Regional Insights
- Bangladesh: Blocked funds fell to $196 million
from $320 million in April. IATA called on the central bank to prioritize
airlines’ access to foreign exchange.
- Africa: About 59% of blocked funds—nearly $1
billion—remain stuck in Algeria, Ethiopia, Mozambique, and other
countries. Significant reductions were noted in Algeria ($193 million,
down from $286 million) and Ethiopia ($43 million, down from $149
million). However, funds in the XAF and XOF zones increased, with both
regional currencies subject to foreign exchange controls.
- Bolivia: Newly added to the list, Bolivia now
holds $42 million in blocked airline funds due to worsening access to
foreign currency, particularly the US dollar.
Read More Pakistan,
Bangladesh asked to release blocked funds of IATA
IATA emphasized that resolving this issue is vital to maintaining global
aviation connectivity, which underpins economic growth and international trade.
Airlines cannot sustain services if they are unable to access their own
revenues, making urgent government action essential.
Source: https://www.thenationalnews.com/