Emirates Airlines has announced the suspension of flights to Nigeria owing to the airline’s inability to repatriate funds that have been trapped in the country. This is the airline’s second suspension of operations in Nigeria in less than two months owing to financial concerns.
This revelation, according to a Channels Television monitoring report, was contained in a statement issued by Emirates Airline on Thursday, claiming that the restriction will take effect on October 29, 2022. According to the airline, it has alerted the federal government and the Central Bank of Nigeria of its position (CBN).
Despite CBN commitments and encouragements to manage its foreign currency requirements, no allocation has been made to Emirates, according to the statement.
The statement from Emirates reads, “Emirates has continued to actively seek a solution for the repatriation of the remainder of its blocked funds in Nigeria. We were encouraged by the Central Bank of Nigeria’s efforts in reviewing our request and considered that this critical issue would be swiftly resolved with the subsequent clearance of our remaining funds.
“However, Emirates has yet to receive an allocation of our blocked funds to be repatriated. Without the timely repatriation of the funds and a mechanism in place to ensure that future repatriation of Emirates’ funds does not accumulate in any way, the backlog will continue to grow, and we simply cannot meet our operational costs nor maintain the commercial viability of our operations in Nigeria.
“We have officially communicated our position and attended multiple hearings with the Nigerian government, and we have made our proposed approach clear to alleviate this untenable situation, including a plan for the progressive release of our funds. This included the repatriation and receipt of at least 80 percent of our remaining blocked funds by the end of October 2022, in addition to providing a guaranteed mechanism to avoid future repatriation accumulation challenges and delays.
“Under these extraordinary circumstances Emirates had no option but to suspend flights to/from Nigeria from 29 October 2022 to mitigate against further losses moving forward.
“We hope to reach a mutual resolution with the Nigerian government around the repatriation of blocked funds to enable the resumption of operations and connectivity for travelers and businesses.”
Forex shortage: Foreign airlines have had to grapple with the challenge of repatriating their funds of about $500 million due to the shortage of foreign exchange. They have been struggling to repatriate their earnings of more than $500 million.
Despite the currency crisis, the federal government was said to have provided $265 million to the country’s airlines to repay unpaid ticket purchases.
Emirates Airline said earlier this month that it will suspend flight operations to Nigeria beginning in September owing to its inability to repatriate over $85 million in revenue from the country, underlining the difficulties faced by global carriers that fly to the country.
Nigerians have restricted access to foreign money for imports and investors wishing to repatriate profits due to a paucity of dollars. Nigeria gets about 90% of its foreign currency from oil, but it is struggling to produce and earn foreign currency due to pipeline damage and oil theft.