Egypt's failure to pay airlines $291M puts country on 'a slippery slope': IATA
International carriers can stop selling tickets in Egypt, only selling through their websites where people pay with a foreign exchange credit card, but this would reduce traffic. (File photo)
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Airlines are becoming increasingly frustrated with Egypt over the country’s inability to repatriate ticket sale earnings, the industry’s top body warned.
The International Air Transport Association (IATA), the world’s largest airline body, said on Friday Egypt is not doing enough to reassure carriers.
“Our members... are concerned,” IATA director-general Tony Tyler said at a media briefing at the group’s annual industry meet in Dublin. “The volume of funds stuck in the country... is steadily growing.”
The central bank reportedly “addressed” the concerns of airlines in March.
However, IATA says Egypt is blocking the repatriation of $291 million (Dh1.07 billion).
“We have had various meetings [with Egyptian officials]. It is very important that these commitments are followed through on,” Tyler said.
Egypt is facing a dollar shortage that has deteriorated since the 2011 revolution that ousted long-term president Hosni Mubarak. Its foreign currency reserves have more than halved since the revolution to $17.01 billion as of the end of April as it struggles to rebuild its tourism sector, a key source for foreign currency.
The EgyptAir crash into the Mediterranean in May could put further pressure on people’s appetite to travel to the country that is already strained because of turmoil, including October’s bombing of a Russian passenger jet over the Sinai.
Tyler warned the restrictions on funds are putting Egypt on a “slippery slope” and that airlines could start cutting flights if they are unable to take out their earnings.
“The sort of measures the airlines can take is they can stop selling in the country, only sell through their websites and people pay with a dollar credit card [or a] foreign exchange credit card, and then of course traffic suffers and falls off and airlines are forced to cut capacity and reduce frequency, he said.
IATA this week also called on Venezuela, Nigeria, Angola and Sudan to stop blocking funds. More than $5 billion is being held by Egypt and the four nations, according to IATA.
Emirates, who has funds held up in Egypt, told Gulf News it has “managed to obtain” some of its revenues from the country and has agreed to “a short-term financial scheme for remitting its residual revenues according to a timeline.” Emirates operates 17 weekly services to Cairo, the Egyptian capital.
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