According to a Thursday Financial Times report, Pakistan is on the verge of experiencing an aviation crisis as airlines struggle to recover $290 million due to the country’s terrible financial problems.
The International Air Transport Association (IATA), which acknowledged that it has become extremely challenging for airlines to serve Pakistan due to their inability to repatriate their dollars-based dues, was noted in the report.
IATA’s Asia-Pacific Director Philip Goh was reported as saying, “Airlines are suffering significant delays before they can repatriate their funds. Several airlines still have money from sales in 2022 trapped in Pakistan.
IATA, which represents 300 airlines and 83% of worldwide air travel, reports that as of January, $290 million was stranded in Pakistan, an increase of almost a third from December. “One would expect airlines to put their valued aircraft assets to greater use elsewhere if conditions remain that make the economics of operation to a country unsustainable,” Goh added.
According to Cirium statistics, foreign airlines have been reluctant to go back into Pakistan, and there are fewer flights scheduled overall in March 2023 than there were in March 2019. There’s no use in travelling to a country if you can’t take money out of it, Mark Martin, the chief executive officer of aviation consultancy Martin Consulting, advised.
It is important to note that in February, Virgin Atlantic announced the suspension of its activities in Pakistan. It claimed at the time that the decision was a part of its attempt to restructure operations, but according to a Financial Times report that cites an informed source, the decision was based on the route’s economics.
According to the Pakistan Civil Aviation Authority, it is making an effort to pay the airlines on time and has been in touch with the appropriate parties to have the problem fixed as soon as possible. A senate panel instructed the aviation ministry to meet with airline CEOs a few weeks ago in order to enable them resume regular operations and remove any unfavourable perceptions of Pakistan.