The International Air Transport Association (IATA) on Wednesday called on the Bangladesh government to immediately release airline revenues over $323m that are being held in contravention of international agreements.
IATA said in a note: "The situation has become dire with airlines unable to repatriate the amount of revenues earned in these markets.”
The association figures out that Bangladesh has more standardized processes, but aviation needs a higher priority from the Central Bank to facilitate access to foreign exchange.
IATA said Bangladesh and Pakistan jointly blocked $720m ($399 million in Pakistan and $323 million in Bangladesh).
Philip Goh, IATA’s Regional Vice President for Asia-Pacific said: “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."
"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,” said Philip Goh.
IATA vice president said: “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.”
IATA also noted that the delays in funds repatriation in Bangladesh are mainly due to a shortage of US dollars.
IATA has engaged with the government to prioritize the aviation sector when allocating US dollar funds within the Bangladesh economy.
“This will enable foreign airlines to remit their respective earnings. We urge the Central Bank and all authorized dealer banks in Bangladesh to prioritize the remittance of the airlines’ funds stuck in Bangladesh as soon as possible.”
It also added that, before Covid-19, Bangladesh’s aviation sector supported around 125,000 jobs and $728 million in economic activity. Passenger numbers recovered to pre-Covid levels in 2023, and are expected to grow by more than two times by 2040.
IATA (International Air Transport Association) represents some 320 airlines comprising 83% of global air traffic.