- Nigeria bound flights popular with Emirates
- Backlash from Citizens expected on Nigerian government
- Emirates would reconsider the decision if payments are availed
All Nigeria bound flights have been affected as Emirates announced in a statement Thursday that it has put a hold on flight operations in and out of Nigeria due to its inability to repatriate funds from the West African country.
Nigeria’s aviation ministry says it is “working hard” to release trapped funds to the Emirates airline after the carrier suspended flights to Nigeria beginning next month. Emirates announced in a statement Thursday that it has put a hold on flight operations in and out of Nigeria due to its inability to repatriate funds from the West African country.
Affected Emirates Passengers would get a refund. Image by Global Upfront Newsapapers
The airline said there has been “no progress” in reaching Nigerian authorities for a solution. “Emirates has tried every avenue to address our ongoing challenges in repatriating funds from Nigeria and have made considerable efforts to initiate dialogue with the relevant authorities for their urgent intervention to help find a viable solution. Regrettably, there has been no progress,” Emirates said in a statement.
EMIRATES AIRLINES HAD ISSUED A WARNING BEFORE
Dubai’s flagship carrier said the circumstances are beyond its control at this stage and assured that it will be working to help impacted customers make alternative travel arrangements wherever possible.
Emirates said it could reconsider its decision “should there be any positive developments in the coming days”. Affected travellers can get refunds for their tickets, it added. The decision comes after Emirates announced last month that it would reduce flights to Nigeria’s commercial capital Lagos.
The carrier said it could not access its funds amounting to $85 million withheld in the country hence necessary to put on hold Nigeria bound flights. The stuck funds had been rising by over $10 million every month, the airline said in a letter addressed to Nigeria’s Aviation Minister Hadi Sirika.
Emirates cargo and passenger volume of traffic bound for Nigeria is significant. Image by Healthcare Africa Magazine
WEAK NIGERIAN CURRENCY
Sirika told the press that trapped funds will be released as this was not the first time Nigeria was holding onto huge amounts of revenue belonging to foreign air carriers.
“In the past, Nigeria has demonstrated the capacity and the willingness and fairness to resolve this type of issue. It happened when we took over power in 2015: There were lots of blocked funds, about $600 million at that time. It was at a time when the country was in a recession and there were dwindling revenues coming to the country, yet we honored our obligation to pay out all those blocked funds,” Sirika told reporters.
“Unfortunately, due to many factors and reasons, the payments piled back up. Government is working hard to ensure that these payments are released, not only for Emirates but all airlines affected,” he added.
It is apparent that Nigeria has restricted access to foreign currency for imports and for investors seeking to repatriate their profits due to a shortage of dollars. Nigeria gets about 90% of its foreign exchange from oil, but is struggling to produce due to pipeline theft and years of under-investment.
Sirika added that “mechanisms will be put in place to ensure that this does not occur in the future.” The minister did not elaborate on what the factors were although Nigeria is grappling with shortages in foreign exchange which has restricted access to foreign currency for imports. Nigerian media reported that around 20 airlines have been unable to repatriate their ticket sale funds of over $600 million (Dh2.2 billion) so far this year from the country.
Earlier in June, the International Air Transport Association said Nigeria was holding onto $450 million revenue belonging to foreign carriers operating in the country.The local currency has been in freefall against the dollar with most of the country’s foreign exchange derived from crude oil sale, which has dwindled due to oil theft in producing communities. The government is also burdened with the high cost of subsidizing fuel for local consumption.
Nigeria is one of Africa’s biggest markets for international carriers and this move will disrupt a lot of business as it is a popular route. The announcement by Emirates Airlines to cancel Nigeria bound flights has put the Nigerian Government on a collusion path with citizens and a backlash is inevitable.
