Voice News

Blocked funds threaten airline operations in Pakistan: Iata

The International Air Transport Association (Iata) has cautioned that rapidly rising amounts of blocked cash endanger airline connectivity in a number of nations, including Pakistan.

The worldwide airline association stated in a statement on Sunday that the industry’s frozen funds have climbed by 47% to $2.27 billion in April 2023 from $1.55 billion in April 2022.

“Airlines cannot continue to provide services in markets where they are unable to repatriate revenues generated by their commercial activities,” the Iata stated.

Willie Walsh, director general of the airline association, asked governments to cooperate with businesses to resolve the situation so that airlines can continue to provide the connectivity that is critical to generating economic activity and job creation.

Nigeria ($812.2 million), Bangladesh ($214.1 million), Algeria ($196.3 million), Pakistan ($188.2 million), and Lebanon ($141.2 million) account for 68.0% of blocked funds.

The airline organization also encouraged governments to follow international treaties and accords to allow airlines to repatriate funds earned from ticket sales, cargo space, and other activities.

In March of this year, the global aviation industry association warned that continuing operations in Pakistan had become “very difficult” as carriers struggled to repatriate funds, complicating matters for international corporations working in the crisis-hit country.
Pakistan is in the grip of a financial crisis, with dangerously low levels of foreign reserves causing shortages and soaring costs for critical products.

Companies are experiencing delays in importing or converting cash, and analysts have warned that the government is on the verge of default.

Airline companies, which sell tickets in local currency but must repatriate dollars to cover expenses such as fuel, have been particularly hard affected.

Virgin Atlantic announced its withdrawal from Pakistan in February of this year, just over two years after it began operations. According to a person acquainted with the decision, the carrier had difficulty repatriating payments, but the decision to cease flights was based on the economics of the route.

Related Articles

Leave a Reply

Your email address will not be published.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