Story ID: GPrepatriation06022016
IATA Urging Governments to Repatriate Airline Revenues
By: Gregory Polek
Caption: Total blocked funds exceed $5 billion, according to the association
Word Count: 403
The International Air Transport Association (IATA) called on governments Thursday to respect international agreements requiring them to ensure airlines can repatriate their revenues. IATA identified Venezuela and Nigeria as two of the worst offenders. Venuezuela, for example, has blocked $3.78 billion of airline revenues over the past 16 months.

“Air connectivity is vital to all economies,” said IATA director general Tony Tyler during his group’s annual general meeting in Dublin. “The airline industry is a competitive business operating on thin margins. So the efficient repatriation of revenues is critical for airlines to be able to play their role as a catalyst for economic activity. It is not reasonable to expect airlines to invest and operate in nations where they cannot efficiently collect payment for their services.”

IATA monitors blocked funds globally, the sum of which exceeds $5 billion. In Venezuela, currency controls implemented in 2003 necessitate government approval to repatriate funds. By 2013, approvals were not keeping pace with the amount of funds requiring repatriation and significant airline revenue accumulated in Venezuela. IATA said the situation became critical in 2015, when the government approved only one request to repatriate funds. Similarly, it has granted only one request to repatriate funds in this year.

Latin American carrier LATAM and Germany's Lufthansa recently suspended all flights to and from Venezuela specifically due to difficulties repatriating funds from ticket sales.

In Nigeria, total airline funds blocked from repatriation now near $600 million. Repatriation “issues” arose in the second half of last year, when demand for foreign currency in the country outpaced supply and the country’s banks couldn’t service currency repatriations. IATA said Nigerian authorities have shown some cooperation with the airlines in seeking measures to make the funds available.

Other countries on IATA’s watch list include Sudan, Egypt and Angola.

“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 all five 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.”