Bangladesh to pay out blocked funds to preserve "dignity"

The Bangladesh Bank, that country's state-owned central bank, has told seven domestic and international Bangladeshi banks to begin releasing funds belonging to foreign carriers after IATA's director general, Willie Walsh, called out the practice at the recent IATA AGM in Istanbul.

Bangladeshi media are reporting that the banks have been told to pay out the funds, with Abul Bashar, a Bangladesh Bank director, saying they had sufficient hard currency reserves. "We've seen that these seven banks can pay with dollars. Some banks might make their payments by tomorrow," said Bashar. "We've asked them to swiftly release the funds as it involves the country's dignity."

According to ch-aviation PRO airports data, 42 carriers operate into Bangladesh's busiest airport, Dhaka's Hazrat Shahjalal International. Of that number, 38 are foreign operators. Bangladesh only ranks behind Nigeria as the world's worst offender when blocking airlines from repatriating funds. According to IATA, Bangladesh owes airlines USD214.1 million. Reportedly, several airlines have cut services into Bangladesh because of this, including Turkish Airlines, Kuwait Airways, Cathay Pacific, and Batik Air. Turkish Airlines is reportedly owed USD24 million and has restricted ticket sales in Bangladesh.

"Airlines cannot continue to offer services in markets where they are unable to repatriate the revenues arising from their commercial activities in those markets," said Walsh earlier this week. "Governments need to work with industry to resolve this situation."

But Bashar disputes the figure quoted by IATA, saying the amount withheld is USD177.8 million. "Various newspapers have reported that foreign airlines will get USD214 million from various banks in Bangladesh. However, we have gathered information from the banks and learned that the airlines will get USD177.79 million, not USD214 million," he said. "It may well be that the airlines have yet to submit the necessary documents against the dues, leading to the difference in the information on the sum between IATA and Bangladesh Bank." According to Bashar, the USD177.8 million outstanding is significantly less than the amount previously blocked. “We’ve paid off USD402.1 million to the airlines since January," he said.