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The IATA also renewed its calls on Venezuela to settle the $3.8 billion in airline funds that have been blocked from repatriation since 2016. Image Credit: AP

Airline funds amounting to nearly $2 billion are stuck in countries awaiting repatriation, a top aviation body said on Thursday.

The International Air Transport Association also called on governments to remove all barriers to airlines repatriating their revenues from ticket sales and other activities.

As many as $394 million have been held back from repatriation over the last six months, a 25 per cent jump, IATA said.

The IATA also renewed its calls on Venezuela to settle the $3.8 billion in airline funds that have been blocked from repatriation since 2016, when the last authorisation 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 a critical for any economy to remain globally connected to markets and supply chains,” said Willie Walsh, IATA’s Director General.

There have been no approvals of repatriation of these airline funds since early 2016 and connectivity to Venezuela has dwindled to a handful of airlines selling tickets primarily outside the country, IATA said in a statement.

“In fact, between 2016 and 2019 (the last normal year before COVID-19) connectivity to/from Venezuela plummeted by 62 per cent. Venezuela is now looking to bolster tourism as part of its COVID-19 economic recovery plan and is seeking airlines to restart or expand air services to/from Venezuela. Success will be much more likely if Venezuela is able to instill confidence in the market by expeditiously settling past debts and providing concrete assurances that airlines will not face any blockages to future repatriation of funds.”

Apart from Venezuela, a sizeable portion of funds are stuck in Nigeria – at $551 million, the aviation body said, even though the African country’s authorities are working with airlines to resolve the issue.

“Repatriation issues arose in March 2020 when demand for foreign currency in the country outpaced supply and the country’s banks were not able to service currency repatriations. Despite these challenges Nigerian authorities have been engaged with the airlines and are, together with the industry, working to find measures to release the funds available,” IATA said.

“Nigeria is an example of how government-industry engagement can resolve blocked funds issues. Working with the Nigerian House of Representatives, Central Bank and the Minister of Aviation resulted in the release of $120 million for repatriation with the promise of a further release at the end of 2022. This encouraging progress demonstrates that, even in difficult circumstances, solutions can be found to clear blocked funds and ensure vital connectivity,” said Kamil Al Awadhi, Regional Vice President for Africa and the Middle East.