SINGAPORE- The International Air Transport Association (IATA) has urged Pakistan and Bangladesh to release airline revenues that violate international agreements promptly.
The situation has become dire, with airlines unable to repatriate over $720 million ($399 million in Pakistan and $323 million in Bangladesh) of revenues earned in these markets.
“The timely repatriation of revenues to their home countries is crucial for payment of dollar-denominated expenses such as lease agreements, spare parts, overflight fees, and fuel. Delaying repatriation violates international obligations outlined in bilateral agreements and increases airline exchange rate risks. Pakistan and Bangladesh must release the more than $720 million they are withholding with immediate effect so that airlines can continue providing the air connectivity on which both economies rely,” said Philip Goh, IATA’s Regional Vice President for Asia-Pacific.
Pakistan should simplify the cumbersome process for repatriation, which currently includes the requirement to provide audit certificates and a tax exemption certificate, which causes unnecessary delays.
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 difficulty strategically using foreign currencies. Airlines operate on razor-thin margins. They need to prioritize the markets they serve based on their confidence in paying 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,” said Goh.
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Mahesh Darkunde
Journalist – He is an Aircraft Maintenance Engineer, Mahesh has always had a knack for all things aviation. He Join Aviation A2Z as a writer nearly 2 years ago.