Emirates suspends flights to Nigeria due to blocked funds

Abuja, Nigeria — Emirates airline will suspend all flights to Nigeria from September 1 because the West African country has failed to repatriate millions of dollars of its money, the Dubai-based airline announced on Thursday.

The airline – which has been fighting to repatriate its millions of dollars in revenue from Nigeria – said it made the “tough decision” to limit further losses, citing circumstances “out of our control,” in a statement.

Emirates announced in July that it has $85 million “pending repatriation from Nigeria”, a figure that is increasing by more than $10 million each month.

“Emirates have made every effort to address our ongoing challenges in repatriating funds from Nigeria, and have made significant efforts to initiate a dialogue with the relevant authorities for their urgent intervention to find a viable solution the airline said on Thursday. “Unfortunately, no progress has been made.”

Other international airlines operating in Nigeria also have revenues stuck in the country, which the International Air Transport Association said in June totaled $450 million.

“Emirati are not alone in this matter. All foreign airlines are in similar predicaments,” said Sindy Foster, an aviation expert from Lagos, who added that the problem of revenue snags is “a recurring problem” that has been building since 2016, when several airlines withdrew from Nigeria over a similar problem. .

Analysts also expressed concern that Emirates’ planned flight suspension could deter investors from Nigeria, whose foreign investment has fallen by 81% in the past two years, according to government statistics released earlier this year.

Nigeria, Africa’s largest economy, is facing a crisis caused by a shortage of foreign exchange, despite being one of Africa’s largest exporters of crude oil. Oil production, the country’s largest source of foreign exchange, has been well below government forecasts this year.

In July, Emirates informed Nigerian authorities that it would reduce its flight operations to the West African nation after unsuccessfully trying “to contain losses by proposing to pay for fuel in Nigeria in nairas (which continues to weaken against the dollars).”

Passengers affected by the planned suspension of flights to Nigeria will be helped to make alternative travel arrangements, Emirates said, pledging to re-evaluate the suspension “should there be any positive developments” regarding the stuck funds.

More foreign airlines could take similar steps if the government does not respond to Emirates’ announcement, said analyst Foster, a principal managing partner at Avaero Capital Partners.

“Most things are imported into Nigeria, which requires dollars to complete the transaction. This is not just an aviation problem. It sends negative signals to the Nigerian economy,” she said.