The International Air Transport Association (IATA) has urged the governments of Pakistan and Bangladesh to release more than $720 million in airline revenues that are currently held up in violation of international agreements.
This substantial amount is made up of US$399 million held in Pakistan and US$323 million in Bangladesh, funds that airlines are struggling to repatriate from those markets, Aviacionline reports.
Philip Goh, IATA Asia-Pacific Regional Vice President, emphasized the critical nature of this problem, stating that timely repatriation of revenue is essential for airlines to cover dollar-denominated expenses such as rentals, spare parts, overflight and fuel.
According to Goh, the delay not only violates international obligations but also increases foreign exchange risks, thereby threatening the operational efficiency of airlines and economic dependence on air connectivity in both countries.
The process for repatriating funds in Pakistan is particularly complex, involving multiple bureaucratic hurdles such as the need to provide audit certificates and tax exemption certificates, which add unnecessary delays. The situation in Bangladesh, although more standardized, still faces prioritization issues within its Central Bank, affecting the aviation sector’s access to currency exchange.
Goh also highlighted the broader economic implications of reduced air connectivity, pointing out its potential to limit economic growth, foreign investment and exports in both nations. “Airlines operate on very tight margins and must prioritize markets based on their confidence in being able to pay their expenses“, he explained, highlighting the urgency of solutions to facilitate the flow of retained funds.
The aviation sectors in both Pakistan and Bangladesh were significant contributors to their respective economies before the COVID-19 pandemic. In Pakistan, aviation supported around 425,000 jobs and generated $2.8 billion in economic activity, with passenger numbers returning to pre-COVID levels in 2023 and expected to grow more than 2.5 times by 2040.
Similarly, in Bangladesh, the sector supported around 125,000 jobs and contributed 728 million to the economy, with similar growth expectations following recovery.
IATA has interacted with the governments of both countries to prioritize aviation and ensure that foreign airlines can remit their profits efficiently. The association remains hopeful that with a concerted effort and government cooperation, the current financial roadblocks can be resolved, thereby ensuring the future of international air travel in Pakistan and Bangladesh.
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Tags: IATA asks Pakistan Bangladesh release million airline revenue
