Foreign airlines money stuck Foreign airlines’ $323m stuck in Bangladesh

The amount of foreign airlines’ money stuck in Bangladesh has increased to $323 million from $214 million in less than a year, according to the International Air Transport Association (IATA).

The IATA, which represents 320 airlines responsible for 83 percent of the global air traffic, yesterday also said Pakistan was withholding $399 million from foreign carriers.

It called on the two countries to immediately release the funds that have been blocked in contravention of international agreements.

“The situation has become severe with airlines unable to repatriate over $720 million [$399 million in Pakistan and $323 million in Bangladesh] of revenues earned in these markets,” the IATA said.

It also said that the timely repatriation of revenues to their countries is critical for payment of dollar-denominated expenses such as lease agreements, spare parts, overflight fees, and fuel.

About Bangladesh, the IATA said the country has more standardized processes, but aviation needs a higher priority from the central bank to facilitate access to foreign exchange.

It also said delays in funds repatriation in Bangladesh were mainly due to a shortage of US dollars.

It urged the Bangladesh Bank and all authorized banks in Bangladesh to prioritize the remittance of the airlines’ funds.

Officials of foreign carriers that serve Bangladesh told The Daily Star that they were not selling tickets to local travel agencies as they could not repatriate a large chunk of their earnings.

Aviation experts said the carriers were instead selling tickets to overseas online travel agencies (OTA) who then sell tickets to local travel agents, forcing the passengers including the migrant workers, to buy tickets at a higher price.

The IATA in June last year rated Bangladesh as the second worst in the world, after Nigeria, in terms of blocking funds.

Names of countries, except Bangladesh and Pakistan, were not mentioned in the IATA’s latest statement.

According to the Civil Aviation Authority of Bangladesh, 32 foreign carriers are operating around 160 flights every day to and from Hazrat Shahjalal International Airport.

Kazi Wahidul Alam, a leading aviation expert in Bangladesh, said foreign airlines’ failure to remit their earnings has been going on for a long time but it has now turned serious as the amount has increased a great deal.

“This may destabilize the country’s aviation sector,” he warned.

He said a few carriers were able to remit some of their stuck funds but it was not enough. This is why most airlines are not selling low-fare tickets in Bangladesh, he added.

“As a result, Bangladeshi passengers and local travel agents are losing out,” he said, adding that the situation will also discourage carriers interested in serving Bangladesh.

ATM Nazrul Islam, another aviation expert, said the country’s image was being sullied.

Civil Aviation Authority of Bangladesh Chairman Air Vice Marshal M Mafidur Rahman recently told The Daily Star that they have requested Bangladesh Bank through the civil aviation ministry to take necessary measures in this regard.

Despite repeated attempts, Mezbaul Haque, spokesperson for Bangladesh Bank, could not be reached for comments.