IATA Seeks Governments’ Help Retrieving $5 Billion In Blocked Funds
IATA is calling on governments to respect international agreements obliging them to ensure airlines are able to repatriate their revenues.
IATA monitors blocked funds globally, the sum of which exceeds $5 billion. The top 2 countries blocking the repatriation of airline funds are Venezuela and Nigeria.
"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," said Tony Tyler, IATA’s Director General & CEO.
Airline funds blocked from repatriation in Venezuela total $3.8 billion. Currency controls implemented in 2003 necessitate government approval to repatriate funds. By 2013, approvals were not keeping pace with the amount of funds requiring repatriation and significant airline revenue accumulated in Venezuela. The situation became critical in 2015 when only one request to repatriate funds was approved. So far in 2016 only one request to repatriate funds has been granted.
Total airline funds blocked from repatriation in Nigeria are nearing $600 million. Repatriation issues arose in the 2nd 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. Nigerian authorities are engaged with the airlines and are, together with the industry, seeking possible measures to make the funds available.
"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 5 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," Tyler said.
Top 5 Country’s Blocking Repatriation of Airline Funds