Airlines happy with RBZ blocked funds solution

Source: Airlines happy with RBZ blocked funds solution | Herald (Business)

International airlines that have been flying into Zimbabwe include Lufthansa Airlines, Emirates, Ethiopian Airlines, Kenya Airways, South African Airways, ComAir, British Airways and RwandAir

Nelson Gahadza Senior Business Reporter

AIRLINES servicing the Zimbabwe route have expressed satisfaction with the payments arrangement the Reserve Bank of Zimbabwe (RBZ) has put in place for the repatriation of blocked funds and current ticket sales.

This was confirmed by secretary for Transport and Infrastructure Development Theodius Chinyanga who said  airlines servicing the country’s route were happy with the payment modalities.

“The airlines are satisfied with the manner that the settlement is being dealt with. Every airline is getting its money when they sell tickets,” Engineer Chinyanga said.

“They are getting their money and there is no Reserve Bank in there and they are charging in foreign currency so those airlines coming in now will never be affected. They have been allowed to retain their money and repatriate it and that is statutory.”

International airlines that have been flying into Zimbabwe include Lufthansa Airlines, Emirates, Ethiopian Airlines, Kenya Airways, South African Airways, ComAir, British Airways and RwandAir.

The country’s outstanding debt to foreign airlines, represented by the International Air Travel Association (IATA) stands at US$142,7 million out of the approximately US$963 million in in-country funds belonging to air travel revenue that could not be repatriated to nearly 20 countries as at close of June 2021.

The arrangement to clear outstanding payments to foreign airlines was recently confirmed by RBZ governor John Mangudya, who said the bank had paid over US$50 million towards the blocked funds.

“That figure owed to airlines should have gone down by more than US$50 million in aggregate,” Dr Mangudya said.

“We are a very responsible Government and a responsible bank. We cannot wish away our obligation or the in-country funds, so we need to ensure that if we say ‘Zimbabwe is Open for Business’, we are also open to paying our commitments.

Dr Mangudya said Zimbabwe had put in place a system whereby funds due to airlines would be released as soon as transactions are made, to avoid fresh backlogs.

“Going forward, we do not expect such things to happen again because they are now being paid as and when the transactions are being made so there will be no more lag between payments to the airlines,” he said.

“We have seen improvements. When you buy a ticket using your foreign currency account or free funds the money goes straight into the account of the airline.

In 2017, IATA’s director-general, Alexandre du Juniac met with President Mnangagwa and Finance and Economic Development Professor Minister Mthuli Ncube to discuss issues regarding the repatriation of funds to respective airlines.

The IATA executive said, then “But it was clear from our fruitful meeting that we are united in our commitment to finding an appropriate solution that will address this and support Zimbabwe’s economic development.”

“Aviation is a key contributor to the prosperity of this country. But funds from the sale of air tickets in Zimbabwe cannot currently be repatriated to airlines. It will be negative for business, trade and tourism if airlines are forced to reduce their service to Zimbabwe,” said du Juniac on the issue of blocked funds.

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