The International Air Transport Association (IATA) called on Bangladesh and Pakistan to immediately release airline revenues reportedly being held in contravention of international agreements.
Bangladesh owes international airlines $323 million, according to a press release published on IATA's website on Thursday (April 24). Pakistan also owes $399 million to international airlines, the association added.
“The timely repatriation of revenues to their home countries is critical for payment of dollar-denominated expenses such as lease agreements, spare parts, overflight fees, and fuel. Delaying repatriation contravenes international obligations written into bilateral agreements and increases exchange rate risks for airlines,” said IATA.
Philip Goh, IATA’s Regional Vice President for Asia-Pacific, said, “Pakistan and Bangladesh must release the more than $720 million that they are blocking with immediate effect so that airlines can continue to efficiently provide the air connectivity on which both these economies rely.”
He said that Pakistan should simplify the onerous process for repatriation. This currently includes the requirement to provide audit certificates and a tax exemption certificate, both of which cause unnecessary delays.
Bangladesh has more standardized processes, but aviation needs a higher priority from the central bank to facilitate access to foreign exchange, Philip Goh observed.
“We recognize that governments have a difficult challenge in how foreign currencies are strategically utilized. Airlines operate with razor-thin profit margins. They need to prioritize the markets they serve based on the confidence they have in being able to pay their expenses with revenues that are remitted in a timely and efficient fashion. Reduced air connectivity limits the potential for economic growth, foreign investment, and exports. With such large sums of money involved in both markets, urgent solutions are needed,” said Goh.
