Amount of blocked airline funds

[Abbas Ali]

Restrictions on remittances from Pakistan - DHL to suspend its "Import Express Product" and restrict outbound shipments

In recent months, regulatory authorities have imposed restrictions on outward remittances for foreign companies operating in Pakistan. In the case of DHL Express, the remittances sent by DHL Pakistan cover the cost of DHL's international aviation, hub, gateway and last-mile delivery incurred through DHL Express global network for the shipments sent/received by our valued customers.

This constraint has made it unsustainable for DHL Express to continue providing the full product offerings in Pakistan. Effective 15 March 2023, DHL Express will be suspending its "Import Express Product" and restricting outbound shipments to a maximum weight of 70 kg per shipment for all customers billed in Pakistan. Please note the last pick-up date will be March 14, 2023, Shipments picked up on or before this date will still be delivered.



Abbas

[adamalikhan]

Airlines pulling out, services ceasing to be offered. This is really bad for Pakistan.

[nopy99]

Well done to DHL for clearly articulating the commercial reason for pausing their service. There is no doubt why DHL have ceased for now, and the govt needs to amend and facilitate policies accordingly.

Virgin must have pulled out for the same reason, but at least DHL issued a clear press release.

DHL is critical to many business operations and functions, such as samples, spares, documents, contracts, etc etc. Hope politicians and relevant authorities take note.

[London Flyer]

Undoubtedly Virgin pulled out for this reason

The policy is anti-business, anti-competition and not in the consumers interest. If these airlines have a bad experience in a market, they don’t touch it again. disappointed.

[Abbas Ali]

Travel Agents Association of Pakistan (TAAP) - https://www.taap.org.pk/ - has issued one-day strike call over the delay in repatriation of payments in USD from Pakistan to foreign airlines since past six months.

TAAP also unhappy over recent increase in Federal Excise Duty (FED) on Business and First Class tickets issued in Pakistan.

Abbas

[Abbas Ali]

Airlines struggle to repatriate USD 290 million stuck in Pakistan - International Air Transport Association (IATA)

The International Air Transport Association (IATA) said $290 million in funds were stuck in Pakistan as of January, the most recent data available, up nearly a third since December. Pakistan currently holds the second-largest amount of foreign currency from airlines globally, after Nigeria.

“Airlines are facing long delays before they are able to repatriate their funds,” Philip Goh, the IATA’s Asia-Pacific head, told the Financial Times. “Some airlines still have funds stuck in Pakistan from sales in 2022.”

Goh said: “If conditions persist that make the economics of operation to a country unsustainable, one would expect airlines to put their valued aircraft assets to better use elsewhere.”

Foreign airlines have been reluctant to return to Pakistan, with fewer total flights scheduled for March 2023 than the same month in 2019.

https://www.arabnews.pk/node/2269586/pakistan

[TheAnalyst]

Sad state of affairs. Sadly in the coming time, we may see more airlines quit Pakistan, we can only dream of more airlines starting their operations in Pakistan.

[Abbas Ali]

International Air Transport Association (IATA) urges the government of Pakistan to increase the allocation of foreign exchange to #airlines operating in the country.

[Karachi Aviator]

IATA coming out making such a statement on international platform is utter humiliation for Pakistan. The government is busy in arresting a particular in Zaman Park. Either more and more airlines will start pulling out of the Pakistani market or more restrictions would be imposed on Pakistani airlines as retaliation. The policy makers are sleeping.

[arshad.altaf]

https://www.dawn.com/news/1742627/dolla ... nes-report

‘Dollar-starved’ Pakistan struggles to pay international airlines: report


RAWALPINDI: The global air transport body has warned of an ‘aviation crisis’ in Pakistan as airlines are struggling to recover $290 million due to a severe financial crisis, the Financial Times reported on Thursday.

Pakistan Civil Aviation Authority (PCAA) has said it was trying to pay the airlines on time and has been in contact with relevant authorities over the issue.

The Financial Times, while quoting the International Air Transport Association (IATA) said it has become “very challenging” for carriers to serve Pakistan as they struggle to repatriate their dues which are paid in dollars.

The IATA, which represents some 300 airlines comprising 83 per cent of global air traffic, said $290m were stuck in Pakistan as of January up by almost a third since December.

“If conditions persist that make the economics of operation to a country unsustainable, one would expect airlines to put their valued aircraft assets to better use elsewhere,” Mr Goh added.

While talking to Dawn, PCAA DG Khaqan Murtaza confirmed airlines were facing some delays in the repatriation of their payments but added that the authority was in contact with the State Bank and the finance minister for timely payments to the airlines.

In December 2022, the global aviation body said Pakistan has blocked $225m it owed to international airlines, making it one of the top markets where airline funds have been blocked from repatriation.

The development coincided with Pakistan’s balance of payment crisis with fast-depleting foreign exchange reserves, standing at a low mark of $4.3bn.

The ongoing crisis has also hit the aviation industry where airlines sell tickets in local currency but repatriate dollars to pay for expenses such as fuel costs.

The FT, citing data from an aviation analytics company Cirium, shared that foreign airlines have been reluctant to return to Pakistan, with fewer total flights scheduled for March 2023 than the same month in 2019.

“If you can’t take money out of a country, then there’s no point in you even going there,” said Mark Martin, chief executive of aviation consultancy Martin Consulting, in the FT report.

Last month, Virgin Atlantic announced the suspension of its operations in Pakistan.

Although the airline said that the decision was part of its plan to revamp operations, the FT, citing a person familiar with the matter, said the decision was based on the economics of the route.

Earlier this month, the Senate Standing Committee on Aviation recommended the aviation ministry meet with the airline heads and ‘dispel the negative opinion about Pakistan’ and convince them to resume operations as usual.

Published in Dawn, March 17th, 2023

[BaDaR]

Airlines Scale Back Pakistan Flights Amid Dollar Repatriation Challenges

A foreign reserve crisis makes serving the country increasingly difficult.

Carriers are growing wary about serving Pakistan with flights amid the country's worsening financial and foreign reserve crisis. Foreign airlines are contending with significant delays in repatriating cash and many have already cut back on flights.

Airlines reluctant on Pakistan flights
According to a report from the Financial Times, international carriers are looking at reducing or entirely scrapping flights to Pakistan as it grows increasingly difficult to repatriate funds. The country's dwindling foreign reserves are becoming a major headache for foreign companies operating in Pakistan, with airlines impacted particularly severely given their reliance on the US dollar to pay for essentials like fuel.


Virgin Pakistan
Photo: Virgin Atlantic
The International Air Transport Association (IATA) has said that around $290 million is trapped in the country, the second-highest amount in the world behind Nigeria, with some airlines still unable to access cash from ticket sales made last year. The situation has led some carriers, notably Emirates and Turkish Airlines, to stop working with or undercut local travel agents in an effort to get passengers to pay with credit cards.

Philip Goh, IATA’s Asia-Pacific head, commented,

"Airlines are facing long delays before they are able to repatriate their funds. Some airlines still have funds stuck in Pakistan from sales in 2022."

How are airlines responding?
A look at Cirium data from March 2023 and March 2019 shows that several international airlines have scaled back services to Pakistan, including Emirates flights down by 24% and Saudia flights by 17%. A comparison of April 2023 and April 2019 reveals a similar story, with four of the five leading foreign carriers (Saudia, Qatar Airways, Emirates and Air Arabia) operating fewer flights than in pre-pandemic times.

Saudia Boeing 787-9
Photo: Markus Mainka I Shutterstock.
Bucking that trend is flydubai, which has increased flights by over 10% - the airline's low-cost model is perhaps better suited to the low-yield VFR (visiting friends and relatives) market that dominates international Pakistani services. It remains to be seen if airlines will suspend or cancel flights to the country entirely - if the situation does worsen we could see airlines pulling out, much like what Emirates did in Nigeria after repeatedly facing problems repatriating funds.

Philip Goh added,

"If conditions persist that make the economics of operation to a country unsustainable, one would expect airlines to put their valued aircraft assets to better use elsewhere."

In February, Virgin Atlantic announced it would be withdrawing from Pakistan entirely at the end of April just two years after launching flights. While the airline did have considerable difficulties in withdrawing its funds, a source familiar with the decision said it was more to do with the route not being economical.

https://simpleflying.com/airlines-pakis ... hallenges/

[b78709]

EK, QR and Etihad services need to be seriously curtailed. They have unfairly targeted PIA. If FOREX shortage helps, so be it.

[ammad]

EK, QR and Etihad services need to be seriously curtailed. They have unfairly targeted PIA. If FOREX shortage helps, so be it.

They should only be allowed one daily to KHI, LHE and to ISB. In return they are doing nothing for PK. PIA once asked for 5th freedom from DXB to JFK, and was never granted and on the other hand full KHI Is handed over to them, causing aviation sector of Pakistan to collapse.

[Badar42]

EK, QR and Etihad services need to be seriously curtailed. They have unfairly targeted PIA. If FOREX shortage helps, so be it.

I understand your sentiments but hows it gonna help ex pats.Theres so much traffic but PIA or other Pakistani airlines simply can't cope with demand.To top it all off PIA can't even fly to Europe and uk. I just paid £950 for return flight to pak in July ,just imagine what prices are gonna be like if there are even less flights operating to Pakistan

[Abbas Ali]

International Air Transport Association (IATA) on Monday called Pakistan a “very challenging environment” to operate in and said airlines could consider diverting their operations as they struggled to repatriate upwards of $290 million dollars from the crisis-hit South Asian nation.

“In general, over time, if conditions persist that make the economics of operation to a country unsustainable, one would expect airlines to put their valued aircraft assets to better use elsewhere,” Albert Tjoeng, Head of Corporate Communications at IATA, said in an email to Arab News query on Monday.

Philip Goh, IATA's Regional Vice President for Asia Pacific, urged the government to increase the allocation of foreign exchange to airlines operating in Pakistan.

“A significant portion of an airline’s operational costs, such as maintenance, over-flights and fuel, are denominated in US dollars and settled through its head office,” Goh said.

“The currency repatriation challenges impact airlines’ timely access to its collection proceeds to meet payment obligations and increase the exposure to adverse foreign exchange movements … We are urging the government to increase the allocation of foreign exchange to airlines operating in Pakistan.”

The IATA official said Pakistan’s foreign exchange controls were affecting the ability of foreign companies to repatriate their funds out of Pakistan and some airlines had funds stuck in Pakistan from sales even in 2022.

“Furthermore, the process for applying for currency repatriation is onerous. Airlines are required to provide an auditor’s certificate with each remittance showing the amount to be remitted,” Goh said.

“This forces them to undergo a monthly audit process (instead of an annual audit). And it adds to the operating costs in Pakistan and prolongs the process."

Goh said with a population of over 220 million people, Pakistan was a huge aviation market but only 10.6 million people flew internationally in 2021-2022: “You can imagine the potential yet to be realized.”

In an IATA study in 2018, the number of air passengers in Pakistan had the potential to reach more than 35 million by 2038, contributing $9.3 billion in GDP and supporting almost 800,000 jobs, IATA’s regional vice president said.

However, both IATA officials said the decision to suspend operations was a commercial one, which would be made by each individual airline based on their circumstances.

Pakistan has been in economic turmoil for months with an acute balance of payments crisis while talks with the IMF to secure $1.1 billion funding as part of $6.5 billion bailout agreed in 2019 have not yet yielded fruit.

https://www.arabnews.pk/node/2280541/pakistan