Emirates Airline said it is reducing its daily flight frequencies to Lagos because of its inability to repatriate over $85 million from Nigeria.
Nigeria is facing forex crisis due to low earnings from crude oil, which is its major export.
The carrier said its 11 weekly flights into Lagos shall be reduced to seven, effective August 15, 2022, should the forex liquidity crisis persist.
The International Air Transport Association (IATA), the clearing house for over 280 airlines globally, earlier raised the alarm over a steady rise in the number of unrepatriated funds in Nigeria and other countries.
Findings showed that the stuck funds from accumulated sales of flight tickets in local currencies was more than $800 million in November 2021. It was brought down to about $283 million as of March this year, but it further increased to $450 million in May and is estimated to reach about $600 million as of June.
Emirates, in a memo signed by its head of international affairs, Majid Al Mualla, said that the airline had been constrained to slash frequency to mitigate losses on account of its funds stranded in Nigeria.
Al Mualla noted that as of July 2022, Emirates had $85 million awaiting repatriation from Nigeria. The figure has been rising by more than $10 million every month, as the ongoing operational costs of its 11 weekly flights to Lagos and five to Abuja continued to accumulate.
“We simply cannot continue to operate at the current level in the face of mounting losses, especially in the challenging post-COVID-19 climate,” he stated.
“This means that not only are Emirates’ revenues accumulating, we also have to send hard currency into Nigeria to sustain our operation. Meanwhile, our revenues are out of reach, and not even earning credit interest.
“Indeed, we have made every effort to work with the Central Bank of Nigeria (CBN) to find a solution to this issue. Our Senior Vice President met with the Deputy Governor of CBN in May and followed up on the meeting by letter to the Governor himself the following month, however, no positive response was received.
“Despite our considerable efforts, the situation continues to deteriorate. We are now in the unfortunate position of having to cut flights, to mitigate against further losses going forward.”
President of the National Association of Nigerian Travel Agencies (NANTA), Susan Akporiaye, described the development as a bad omen for the industry and its operators.
Akporiaye said the association had consistently appealed to the government to prioritise repatriation of airlines’ funds as a going concern.
Copyright Ships & Ports Ltd. Permission to use quotations from this article is granted subject to appropriate credit given to www.shipsandports.com.ng as the source.
