The International Air Transport Association (IATA) has raised the alarm that the failure of governments to repatriate nearly $1billion of airlines’ revenues trapped in their countries could slow the recovery of travel and tourism in affected markets.
This follows a report that approximately $963 million in airline funds are being blocked from repatriation in nearly twenty countries. Four countries – Bangladesh ($146.1 million), Lebanon ($175.5 million), Nigeria ($143.8 million), and Zimbabwe ($142.7 million) – account for over sixty per cent of this total.
The stuck fund is proceeds of ticket sales made in local currency but blocked due to the non-availability of foreign exchange to recoup it.
Consequently, the Director-General of IATA, Willie Walsh, urged governments to abide by international agreements and treaty obligations to enable airlines to repatriate the amount in blocked funds from the sale of tickets, cargo space, and other activities.
“Governments are preventing nearly $1 billion of airline revenues from being repatriated. This contravenes international conventions and could slow the recovery of travel and tourism in affected markets as the airline industry struggles to recover from the COVID-19 crisis.
Airlines will not be able to provide reliable connectivity if they cannot rely on local revenues to support operations. That is why it is critical for all governments to prioritize ensuring that funds can be repatriated efficiently. Now is not the time to score an ‘own goal’ by putting vital air connectivity at risk” he said.
Speaking further, Walsh called for collaboration to resolve this issue.
“We encourage governments to work with industry to resolve the issues that are preventing airlines from repatriating funds. This will enable aviation to provide the connectivity needed to sustain jobs and energize economies as they recover from COVID-19,” said Walsh.
IATA had recently lamented that blocked airlines funds are pretty high in Africa amounting to $601 million in Africa across seventeen countries. The countries are Algeria, Nigeria, Angola, Benin, Burundi, Central African Republic, Eritrea, Ethiopia, Equatorial Guinea, Malawi, Mozambique, Sudan, Gabon, Cameroon, Chad, Congo, and Zimbabwe, putting further pressure on airlines as they struggle for survival.
“In Africa, there are a number of countries that have seen funds persistently blocked and it affects the decisions of the airlines to serve these markets and it is important for governments to understand the impact it can have on airlines especially on passengers that have fewer choices. People need to get access to markets” he added.