‘BLOCKED FUNDS’ COULD DELAY GLOBAL AIRLINE RECOVERY FROM COVID

Airlines association Iata has warned the industry’s recovery from the Covid-19 pandemic could be “slowed” by the failure of some governments to allow members to repatriate funds.

Iata estimates that around there are $1 billion in “blocked funds” earned by airlines around the world, including money from ticket sales, cargo space and other activities.

Willie Walsh, Iata’s director general, called for governments in countries such as Bangladesh, Lebanon and Nigeria to allow airlines to repatriate these funds.

He added that failure to release this cash “could slow the recovery of travel and tourism in affected markets as the airline industry struggles to recover from the Covid-19 crisis”.

“Airlines will not be able to provide reliable connectivity if they cannot rely on local revenues to support operations,” said Walsh. “That is why it is critical for all governments to prioritise ensuring that funds can be repatriated efficiently. Now is not the time to score an ‘own goal’ by putting vital air connectivity at risk.”

Iata said that $963 million in airline funds was currently being blocked by countries in around 20 countries, with four – Bangladesh, Lebanon, Nigeria and Zimbabwe – accounting for more than 60% of the total.

Although the association added that there had been “positive progress in reducing blocked funds in Bangladesh and Zimbabwe of late”.

These figures do not include the estimated $4 billion in airline revenues currently blocked from leaving Venezuela.

“We encourage governments to work with industry to resolve the issues that are preventing airlines from repatriating funds. This will enable aviation to provide the connectivity needed to sustain jobs and energise economies as they recover from Covid-19,” said Walsh.