Emirates Airlines announced on Thursday that starting on September 1, 2022, it would stop operating flights to Nigeria.
This was announced by the national airline of the United Arab Emirates (UAE), which cited the inability to repatriate its foreign exchange gains from Nigeria as the reason for its choice.
About three weeks ago, the airlines pleaded with Hadi Sirika, the minister of aviation, to help the repatriation of their revenue, which is estimated to be $85 million. Nigeria is experiencing a currency crisis, which has caused the native currency, the naira, to weaken versus the dollar.
Emirates airline announced its intention to scale back operations in Nigeria in a letter to the minister that was signed by Sheik Majid Al Mualla, the airline’s Divisional Senior Vice-President (DSVP), International Affairs. The letter stated that the planned reductions in operations would start on August 15, 2022.
There would be seven fewer flights per week at Murtala Muhammed International Airport (MMIA), in Lagos, as opposed to 11 per week.
“We have had no choice but to take this action, to mitigate the continued losses Emirates is experiencing as a result of funds being blocked in Nigeria,” the airlines said.
“As of July 2022, Emirates has US$ 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 also requested assistance from the Nigerian government to alleviate its financial constraints, which were cited as the main problem with the airline’s operations.