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Emirates cuts flights to Nigeria over unremitted funds - CH-AVIATION

AUGUST 03, 2022

Emirates (EK, Dubai Int'l) is cutting flights to Lagos from August 15 to mitigate continued losses resulting from the Central Bank of Nigeria (CBN) withholding at least USD85 million of the airline’s funds, according to a letter by Emirates Divisional Senior Vice President Majid Al-Mualla to Nigerian Aviation Minister Hadi Sirika.

In the July 22 letter leaked to Nigerian newspapers, Al-Mualla appealed to Sirika to intervene to help the Emirati carrier repatriate its funds, failing which it would be forced to reduce its frequencies from 11 to seven weekly. Such a decision, it said, was not taken lightly: “We have no choice but to take this action”.

“As of July 2022, Emirates has USD85 million of funds awaiting repatriation from Nigeria. This figure has been rising by more than USD10 million every month, as the ongoing operational costs of our 11 weekly flights to Lagos and five to Abuja continue to accumulate,” Al-Mualla wrote.

“These funds are urgently needed to meet our operational costs and maintain the commercial viability of our services to Nigeria. We simply cannot continue to operate at the current level in the face of mounting losses, especially in the challenging post-Covid-19 climate.”

Emirates said it had tried to stem the losses by proposing to pay for fuel in Nigeria in local currency, which would have partly offset its ongoing costs, however, this request was denied by the supplier. That meant that not only were Emirates’ revenues accumulating in Nigeria, out of reach and not earning interest, but the carrier also had to send hard currency into Nigeria to sustain its operations.

The airline said it had made every effort to solve the situation with the CBN, but no positive response was received. Meetings were also held with Emirates' own bank in Nigeria and in collaboration with IATA to discuss improving forex allocation, but with limited success, Al-Mualla wrote.

In a statement shared with ch-aviation, Emirates said: “Emirates continues to encounter issues in repatriating funds out of Nigeria, which has begun to impact the commercial viability of our operations. We have been making every effort to find a solution to this issue through constructive and substantive dialogue with limited success, and welcome any support from the Nigerian government so we can move towards a positive outcome to avoid a reduction in our operations. We currently serve Lagos with 11 weekly services and hope to continue our full operating schedule to and from Nigeria and provide much-needed connectivity for our customers.”

Nigeria's Ministry of Aviation did not respond to a request for comment.


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