International Air Transport Association (IATA) has called on governments to respect international agreements obliging them to ensure airlines are able to repatriate their revenues.
Tony Tyler, director-general/CEO of IATA, made the call at IATA’s 72nd annual general meeting in Dublin.
According to Tyler, “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.”
Tyler said IATA monitored blocked funds globally, the sum of which exceeded $5 billion and that the top two countries blocking the repatriation of airline funds were Venezuela and Nigeria.
On Venezuela, IATA said airline fund blocked from repatriation in was $3.8 billion, adding that currency controls implemented in 2003 necessitated 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 said so far in 2016 only one request to repatriate funds had been granted by the Venezuelan government, saying that in Nigeria the total airline funds blocked from repatriation was 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.”
