IATA Urges Governments To Tackles Airlines’ Blocked Funds
…As Airlines Face Repatriation Problems In Venezuela, Nigeria, 3 Others
The International Air Transport Association (IATA) has called on governments to respect international agreements obliging them to ensure airlines are able to repatriate their revenues.
The Director General and Chief Executive Officer of IATA, Tony Tyler made the call at IATA’s 72nd Annual General Meeting (AGM)in Dublin
According to him, “Air connectivity is vital to all economies. The airline industry is a competitive business operating on thin margins. So the efficient repatriation of revenues is critical for airlines to be able to play their role as a catalyst for economic activity. It is not reasonable to expect airlines to invest and operate in nations where they cannot efficiently collect payment for their services.”
Venezuela and Nigeria
Tyler hinted that IATA monitored blocked funds globally, the sum of which exceeds $5 billion and that the top two countries blocking the repatriation of airline funds are Venezuela and Nigeria.
On Venezuela IATA disclosed that airline funds blocked from repatriation in Venezuela is $3.8 billion, adding that currency controls implemented in 2003 necessitate government approval to repatriate funds.
It added that by 2013, approvals were not keeping pace with the amount of funds requiring repatriation and significant airline revenue accumulated in Venezuela and that the situation became critical in 2015, when only one request to repatriate funds was approved.
Tyler added that so far in 2016 only one request to repatriate funds has been granted by the Venezuelan government.
Tyler stated that in Nigeria the total airline funds blocked from repatriation in Nigeria is about $600 million.
It stated that repatriation issues arose in the second half of 2015, when demand for foreign currency in the country outpaced supply and the country’s banks were not able to service currency repatriations.
IATA, however stated that Nigerian authorities were engaging the affected airlines seeking possible measures to make the funds available.
In his words, “Blocked funds are a problem in a diverse group of countries, some of them undergoing significant economic challenges particularly with a fall-off in oil revenues. But one thing all five nations have in common is the urgent need for robust air connectivity that is being hampered by airlines’ difficulty in repatriating funds. Strong connectivity is an economic enabler and generates considerable economic and social benefits–something that struggling economies need more than ever. It is in everybody’s interest to ensure that airlines are paid on-time, at fair exchange rates and in full.”
IATA listed the top five country’s blocking repatriation of airlines’ funds to include: Venezuela blocking $3,780 million for 16 months, Nigeria came second blocking about $591million for seven months, the third country on IATA’s list is Sudan with $360 million and for four months.
Others are Egypt blocking $291 million held also for four months and Angola, who blocked Airlines $237 million for seven months.