On Thursday, the International Air Transport Association (IATA) urged Pakistan to promptly release airline revenues being withheld, which goes against international agreements.
IATA issued a statement highlighting a critical situation where airlines are unable to repatriate over $720 million in revenues, with $399 million held in Pakistan and $323 million in Bangladesh. This delay in repatriation violates international obligations outlined in bilateral agreements and amplifies exchange rate risks for airlines. Philip Goh, IATA’s Regional Vice President for Asia-Pacific, emphasized the urgent need for Pakistan and Bangladesh to promptly release the blocked funds to ensure airlines can efficiently maintain vital air connectivity upon which both economies depend.
The statement emphasized the need for Pakistan to streamline the burdensome repatriation process, which currently includes requirements such as providing audit certificates and tax exemption certificates. These prerequisites lead to unnecessary delays.
Acknowledging the challenges governments face in managing foreign currencies strategically, IATA stressed that airlines operate on narrow profit margins. They must prioritize markets based on the confidence in timely and efficient revenue remittance to cover expenses. Reduced air connectivity hampers economic growth, foreign investment, and exports. Given the substantial sums involved in both markets, immediate solutions are imperative, added Goh.
