The governments of Venezuela and Nigeria keep applying market restricting policies on airlines, including restrictions on the repatriation of currency.
At its yearly conference last week the International Air Transport Association (IATA) called on governments to respect international agreements obliging them to ensure airlines are able to repatriate their revenues.
“Air connectivity is vital to all economies. 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,” said Tony Tyler, IATA’s Director General and CEO.
According to IATA airline funds blocked from repatriation in Venezuela total $3.8 billion. 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. The situation became critical in 2015 when only one request to repatriate funds was approved. So far in 2016 only one request to repatriate funds has been granted.
Nigeria is the second worst country in funds blocking. Total airline funds blocked from repatriation in Nigeria are nearing $600 million. Repatriation issues arose in the second half of 2015 when demand for foreign currency in the country outpaced supply and the country’s banks were not able to service currency repatriations. Nigerian authorities are engaged with the airlines and are, together with the industry, seeking possible measures to make the funds available.
Source: IATA< Return