The State Bank of Pakistan (SBP) has blocked $225 million in airline funds for repatriation.
Pakistan is at a high risk of being banned by the International Air Transport Association (IATA) – the global liaison for ensuring airline standards and sustainability – if the central bank continues to block payments to international airline companies.
People on condition of anonymity told ProPakistani that the central bank has blocked outward remittances to an amount that could rise above $0.25 billion to control foreign currency outflows as the nation struggles to battle its way out of the ongoing liquidity crunch.
This is the second high-profile payment issue after SBP last month blocked payments of $34 million in direct carrier billing (DCB) to international service providers such as Google, Amazon, and Meta. Upon refusal to lift the blockade, Google suspended carrier-paid apps in Pakistan.
In its official statement, IATA has warned that the amount of airline funds for repatriation being blocked by governments has risen by more than 25 percent or $394 million in the last six months. Total funds blocked now tally at close to $2 billion. IATA has called on governments to remove all barriers to airlines repatriating their revenues from ticket sales and other activities, in line with international agreements and treaty obligations.
Elsewhere, the IATA is also renewing its calls on Venezuela to settle the $3.8 billion of airline funds that have been blocked from repatriation since 2016 when the last authorization for limited repatriation of funds was allowed by the Venezuelan government.
“Preventing airlines from repatriating funds may appear to be an easy way to shore up depleted treasuries, but ultimately the local economy will pay a high price. No business can sustain providing service if they cannot get paid and this is no different for airlines. Air links are a vital economic catalyst. Enabling the efficient repatriation of revenues is critical for any economy to remain globally connected to markets and supply chains,” said Willie Walsh, IATA’s Director General.
Airline funds are being blocked from repatriation in more than 27 countries and territories. The top five markets with blocked funds (excluding Venezuela) are Nigeria: ($551 million), Pakistan ($225 million), Bangladesh ($208 million), Lebanon ($144 million), and Algeria ($140 million).
ProPakistani has reached out to the State Bank of Pakistan (SBP) on this matter and the official response will be added, once received.
Lagay raho