According to the Dubai based airline, the West African country has failed to repatriate millions of dollars of its funds.
The airline said it took the “difficult decision” in order to limit further losses, citing circumstances “beyond our control,” in a statement on Thursday August 18.
Emirates announced in July that it has $85 million “awaiting repatriation from Nigeria,” a figure it said was rising by more than $10 million every month.
“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,” the airline said adding that “Regrettably there has been no progress.”
Other international airlines operating in Nigeria also have revenues trapped in the country which the International Air Transport Association said in June amounted to $450 million.
“Emirates are not alone in this issue. All the foreign airlines are in similar predicaments,” said Sindy Foster, a Lagos-based aviation expert, who added that the issue of trapped revenues is “a recurring problem” building up since 2016 when several airlines pulled out of Nigeria over a similar issue.
Analysts also expressed worry that Emirates’ planned suspension of flights could scare away investors from Nigeria whose foreign investments dropped by 81% over the last 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 which is the country’s largest earner of foreign exchange has been far below the government’s projections this year.
In July, Emirates informed Nigerian authorities it would reduce its flight operations to the West African nation after trying unsuccessfully “to stem the losses by proposing to pay for fuel in Nigeria in nairas (which continues to weaken against the dollar).”
Passengers affected by the planned suspension of flights to Nigeria will be assisted in making alternative travel arrangements, Emirates said, promising to re-evaluate the suspension “should there be any positive developments” regarding the trapped funds.
More foreign airlines could take similar measures if the government does not act on Emirates’ announcement, said analyst Foster, a principal managing partner at Avaero Capital Partners.
Author: Staff Writer