International Air Transport Association Urges Pakistan and Bangladesh to Unlock Airlines $720M Revenue
The International Air Transport Association (IATA) has urged Pakistan and Bangladesh to promptly release airline revenues that are being withheld against international agreements. The issue has escalated, with airlines unable to retrieve more than $720 million in total ($399 million in Pakistan and $323 million in Bangladesh) from their earnings in these regions.
“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. 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,” said Philip Goh, IATA’s Regional Vice President for Asia-Pacific.
Pakistan needs to streamline the burdensome repatriation process, which presently involves submitting audit certificates and a tax exemption certificate, leading to avoidable delays. Bangladesh, on the other hand, boasts more standardized procedures, yet aviation requires greater prioritization from the Central Bank to enhance foreign exchange accessibility.
“We recognize that governments have a difficult challenge in how foreign currencies are used strategically. Airlines operate on razor-thin 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.
