Blocked funds worldwide now surpass $5 billion. IATA’s Director General and CEO, Tony Tyler said it was not reasonable “to expect airlines to invest and operate in nations where they cannot efficiently collect payment for their services.”
In Venezuela, airlines’ blocked funds total $3.8 billion. Airlines cannot repatriate funds without government approval but the slow process means only one airline request was approved in 2015. And a solitary approval is all airlines have to show for 2016 to date.
Nigeria, meanwhile, has accumulated $600 million in blocked funds. The problem stems from a shortage of foreign currency, which renders the country’s banks unable to service foreign currency repatriations. Nigerian authorities are engaged with the airlines and are, together with the industry, seeking possible measures to make the funds available.
“Blocked funds are a problem in a diverse group of countries, some of them undergoing significant economic challenges particularly with a fall-off in oil revenues,” said Tyler. “But one thing these nations have in common is the urgent need for robust air connectivity that is being hampered by airlines’ difficulty in repatriating funds. Strong connectivity is an economic enabler and generates considerable economic and social benefits—something that struggling economies need more than ever. It is in everybody’s interest to ensure that airlines are paid on-time, at fair exchange rates and in full.”
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