Emirates, one of two flag carriers of the United Arab Emirates, announced on Thursday that it will stop flying to Nigeria on September 1, 2022. The UAE’s flag carrier announced the decision in a statement, blaming it on the inability to repatriate its earnings in foreign exchange from Nigeria.
This comes about three weeks after the airlines asked the Minister of Aviation, Hadi Sirika, to support the repatriation of $85 million in revenue. Nigeria is experiencing a forex crisis, which has caused the country’s local currency, the Naira, to depreciate against the US dollar.
Emirates airline’s Divisional Senior Vice-President (DSVP), International Affairs, Sheik Majid Al Mualla, said in a letter to the minister that the planned reductions in its operations in Nigeria would take effect on August 15, 2022.
It stated that flights at Lagos’ Murtala Muhammed International Airport (MMIA) would be reduced from 11 to seven per week.
“We have had no choice but to take this action, to mitigate the continued losses Emirates is experiencing as a result of funds being blocked in Nigeria,” the airlines said.
“As of July 2022, Emirates has US$ 85 million of funds awaiting repatriation from Nigeria. This figure has been rising by more than $US 10 million every month, as the ongoing operational costs of our 11 weekly flights to Lagos and 5 to Abuja continue to accumulate.”
Noting that the funds are urgently needed to meet its operational costs and maintain the commercial viability of its services to Nigeria, the airlines said it cannot continue to operate at the current level “in the face of mounting losses, especially in the challenging post-COVID-19 climate.”
It added, “Emirates did try to stem the losses by proposing to pay for fuel in Nigeria in Nairas, which would have at least reduced one element of our ongoing costs, however, this 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.
“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. 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.
“Meetings were also held with Emirates’ own bank in Nigeria and in collaboration with IATA to discuss improving FX allocation, but with limited success. 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.”
It further asked the Nigerian government for support to address its financial constraint, said to be a primary issue to the airlines’ operations.