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  • Chidozie Uzoezie

Emirates Scales Down Operations to Nigeria Over Blocked Funds



As if the Nigerian aviation industry has not had enough challenges, Emirates has announced that it will reduce the number of flights to Nigeria with effect from August 15, due to its inability to repatriate funds from the country.


The airline disclosed this information in a letter dated July 22 addressed to Nigeria’s Minister of Aviation, Hadi Sirika, and signed by its DSVP International Affairs, Majid Al Mualla.


“With effect from 15 August 2022, Emirates will be forced to reduce flights from Dubai to Lagos from 11 per week to 7 per week. We have had no choice but to take this action, to mitigate the continued losses Emirates is experiencing as a result of funds being blocked in Nigeria,” the letter partly read.


According to the letter, Emirates had $ 85 million of funds awaiting repatriation from Nigeria as of July. It said the figure has been rising by more than $10 million every month, while the operational costs of its 11 weekly flights to Lagos and 5 to Abuja continue to rise.


The airline said these funds are urgently needed for them to meet their operational costs and maintain the commercial viability of our services to Nigeria.


“We simply cannot continue to operate at the current level in the face of mounting losses, especially in the challenging post COVID-19 climate,” the airline noted.


According to the Bilateral Air Service Agreements (BASAs) with countries, airline tickets are mostly sold in naira while the airlines would repatriate the funds in dollars through the country’s central bank.


On its part, Emirates said it had made attempts to reduce the losses by paying for fuel in Nigeria in Naira, which would have at least reduced one element of its costs, but that the request was denied by the supplier.


“This means that not only are Emirates’ revenues accumulating, we also have to send hard currency into Nigeria to sustain our own operation. Meanwhile our revenues are out of reach and not even earning credit interest,” the airline added.


“Your Excellency, this is not a decision we have taken lightly. Indeed, we have made every effort to work with the Central Bank of Nigeria (CBN) to find a solution to this issue.”


It said, “Our Senior Vice-President met with the Deputy Governor of the CBN in May and followed up on the meeting by letter to the Governor himself the following month, however no positive response was received.” the letter said.


Nigeria is currently facing forex crunch amid low oil revenues and rising demand for dollars. Naira sold for N700 a dollar on Friday at the parallel market, about its worst performance. Emirates, however, said it would reconsider it's position should the situation improve.


“Should there be any positive development in the coming days, we will of course re-evaluate this decision,” the airline noted.


As Nigeria grapples with forex scarcity, domestic airlines within the past few months have had to contend with the astronomical increase in aviation fuel which is threatening the airlines' operations.


But speaking on Tuesday during an emergency meeting with airline operators, Sirika said, “there are no immediate solutions” to the lingering crisis in the Nigerian aviation industry as the problem is global.


Will more international airlines reduce operations or even stop flying to Nigeria entirely? Only time will tell.

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