Amid the ongoing economic turmoil, the Financial Times in a report stated that the International Air Transport Association (IATA) has warned that an aviation crisis could hit Pakistan as airlines are battling to recover $290 million owing to a severe financial crisis.
The Financial Times reported that the International Air Transport Association (IATA) had stated that it had become “very challenging” for airlines to serve Pakistan due to their struggle to repatriate the dollars owed to them. As of January, the IATA reported that $290m was stuck in the country, an increase of almost a third since December.
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The IATA’s Asia-Pacific head, Philip Goh, pointed out that airlines were facing long delays before they could repatriate their funds, with some airlines still waiting for money from sales in 2022.
He also warned that if the economic conditions in the country remained unsustainable, airlines would likely put their aircraft assets to better use elsewhere. In response, the Pakistan Civil Aviation Authority (PCAA) stated that it was trying to ensure payments were made on time and was in contact with the relevant authorities concerning the issue.
The Financial Times has reported that foreign airlines have been reluctant to return to Pakistan, with fewer total flights scheduled for March 2023 than the same month in 2019. Mark Martin, Chief Executive of aviation consultancy Martin Consulting, noted that this was likely due to the difficulty of taking money out of the country.
Last month, Virgin Atlantic announced the suspension of its operations in Pakistan, citing economic reasons. In response to this trend, the Senate Standing Committee on Aviation has recently recommended that the aviation ministry meet with airline heads to address the negative opinion about Pakistan and encourage them to resume regular operations.
