The International Air Transport Association (IATA) has lamented the failure of governments to repatriate nearly $1 billion of airlines’ revenues trapped in their countries. The association, which represents 290 global airlines or 82 percent of global traffic, has however 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. IATA slams Africa over trapped funds.
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. According to Director-General of IATA, Willie Walsh, “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.”
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 percent of this total. Although there has been positive progress in reducing blocked funds in Bangladesh and Zimbabwe of late.
“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.
It is very much a case of Africa as a continent probably has the most blocked funds around the world. We can see that it is a temporary blockage to get the funds repatriated. According to Walsh, “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”.
The over $4 billion in airline revenues blocked in Venezuela has not been resolved successfully. It is not, however, included in IATA’s tracking. The release of the $601 million of airline revenues that are currently blocked from repatriation in certain governments according to IATA would be an immediate boost in some markets.