The International Air Transport Association (IATA) has called on Pakistan and Bangladesh to immediately release airline revenue that are being held in contravention of international agreements.
The situation has become severe with airlines unable to repatriate over $720 million ($399 million in Pakistan and $323 million in Bangladesh) of revenues earned in these markets.
Regional Vice President of the IATA for Asia-Pacific Philip Goh stated in a press release on Thursday, “Pakistan should simplify the onerous process for repatriation. This currently includes the requirement to provide audit certificates and a tax exemption certificate, both of which cause unnecessary delays”.
Stated in a press release the IATA issued to TLTP, “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.”
He was of the view that 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. Philip Goh pointed out that Bangladesh has more standardized processes, but aviation needs a higher priority from the Central Bank to facilitate access to foreign exchange. “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,” Goh concluded.
