Air transport warns of rising funds jeopardizing airline connectivity.
According to a statement released by the International Air Transport Association (Iata) on Sunday, the industry freezing funds climbed by 47% to $2.27 billion in April 2023 from $1.55 billion in the same month of the previous year.
The Iata further stated that “Airlines cannot continue to provide services in markets where they are unable to repatriate the revenues arising from their commercial activities in those markets.”
Willie Walsh, the director general of the airline association, asked the governments to cooperate with business to find a solution so that airlines could continue to offer the connectivity that is essential for boosting economic activity and job creation.
The top five nations, 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 the blocked funds.
In order for airlines to be able to repatriate these monies obtained from the sale of tickets, cargo space, and other activities, the airline association also encouraged governments to uphold their duties under international accords and treaties.
The international aviation industry association issued a warning in March of this year, stating that it had grown “very challenging” to continue operations in Pakistan due to carriers’ struggles to return currency, which made things more difficult for foreign businesses doing business in the crisis-stricken nation.
Dangerously low levels of foreign reserves, Pakistan is experiencing a worsening financial crisis, which is driving up the cost of basic products and creating shortages of them.
The government is at risk of default, analysts have warned, and businesses are dealing with delays in importing or changing currencies.
The impact has been particularly severe for airlines, which sell tickets in local currency but must repatriate dollars to cover costs like fuel.