Lack of payment from “underdeveloped” countries complicates international airlines

I know owes nearly $ 1 billion to airlines between 20 countries as governments seek to hold onto hard currencies, robbing the industry of vital cash at a time when travel has been hit hard by the coronavirus crisis.

The figures published by the International Air Transport Association (IATA, for its acronym in English) show that Venezuela currently has an additional US $ 4 billion that has been pending for years and could be lost to operators for good.

Lebanon, Bangladesh, Nigeria and Zimbabwe they are the worst offenders among other states, and account for 60% of the deficit of US $ 963 million, according to IATA. While the total is lower than in previous years, it is higher as a proportion of overall sales after the limited theft pandemic.

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“Airlines won’t be able to provide reliable connectivity if they can’t depend on local revenues. to support operations, ”IATA Managing Director Willie Walsh said in a statement. “Now is not the time to score an own goal endangering vital air connectivity.”

While stranded remittances have plagued aviation for years, it became a major problem in 2013 when Venezuela tightened currency controls, prompting several airlines to cancel or cut flights.

Angola owed nearly $ 500 million in 2018 amid a persistent shortage of foreign exchange reserves, before IATA negotiated a release of funds.

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The current problems in Lebanon, which owes $ 176 million, arose out of an economic crisis that began in 2019 and was exacerbated by the Covid-19 and a deadly explosion that hit Beirut last year.

IATA says there has been progress in reducing stranded funds in Bangladesh and Zimbabwe, which each owe around $ 145 million to airlines. This is roughly the same as the amount outstanding in Nigeria, a country that eliminated a previous deficit in 2018 before piling up again last year due to the virus and an associated drop in the price of oil. .

The airlines trade group said it was no longer including Venezuela’s deficit in its monitoring.

CDI CP