Pakistan Blocks Rs 1,554 Crore in Airline Funds for Repatriation, Threatens Flight Connectivity: IATA

Pakistan has blocked $188 million (INR 1,554 Crore) of airlines’ dues, becoming one of the top five countries restricting the industry from repatriating funds, the International Air Transport Association (IATA) said in a statement on Sunday.

Pakistan was included in the list of “blocked fund” country in April last year. The country has been monitored and flagged in IATA’s list of countries this year too.

Apart from Islamabad, the other countries in the list are Nigeria ($812.2 million), Bangladesh ($214.1 million), Algeria ($196.3 million) and Lebanon ($141.2 million).

IATA also warned that the airline industry’s blocked funds have increased by 47% to $2.27 billion in April 2023 from $1.55 billion in April 2022.

IATA’s Director General said that airline companies cannot continue to offer services when they are unable to repatriate the revenues and appealed the governments of the countries to resolve the situation.

“Airlines cannot continue to offer services in markets where they are unable to repatriate the revenues arising from their commercial activities in those markets. Governments need to work with industry to resolve this situation so airlines can continue to provide the connectivity that is vital to driving economic activity and job creation,” IATA’s Director General Willie Walsh said, according to the statement.

In March, the global airline industry body had warned that it had become “very challenging” to continue operations in Pakistan as carriers struggle to repatriate dollars, adding to difficulties for foreign companies operating in Islamabad.

The airline association also urged governments to abide by international agreements and enable airlines to repatriate these funds made from the sale of tickets and other activities.

IATA represents around 300 airlines comprising 83% of global air traffic.

Recently, Malaysia impounded a Pakistan International Airlines Boeing 777 aircraft with passengers on board over payment of dues amounting to $4 million, following a court order.

The aircraft was acquired by the PIA on lease from Malaysia. The plane was stopped at the Kuala Lumpur airport. The plane was later released after the Pakistani Ministry of Foreign Affairs intervened and assured the Malaysian authorities of payment of dues.

Pakistan is suffering from a financial crisis as the foreign reserves have fell to a record low. The prices of essential goods have risen while the Pakistan rupee has devalued against the US dollar.

(With Inputs from Shailendra Wangu)