EMIRATES Airlines says it has decided to reduce the number of its weekly flights from Dubai to Lagos from 11 to seven due to issues of repatriation of its funds.
In a letter addressed to the Nigerian Minister of Aviation, Hadi Sirika, Emirates stated it had been attempting to repatriate the sum of $85 million it alleged was stuck in Nigeria.
The letter, signed by the Divisional Senior Vice President, Sheik Majid Al Mualla, said that due to the blocked funds, it would be cutting its flight frequencies from August 15, 2022.
It read, “With effect from 15 August 2022, Emirates will be forced to reduce flights from Dubai to Lagos from 11 per week to 7 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.
“As of July 2022, Emirates has $85m of funds awaiting repatriation from Nigeria. This figure has been rising by more than $10m every month as the ongoing operational costs of our 11 weekly flights to Lagos and 5 to Abuja continue to accumulate.”
It said the blocked funds were beginning to affect the carrier’s operating costs, as well as its commercial viability, adding it could not continue to accumulate losses in the face of the challenging coronavirus pandemic.
“Emirates did try to stem the losses by proposing to pay for fuel in Nigeria, 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,” the airline added.
It outlined its efforts in meeting with the Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, in May 2022 to resolve the issue.
It also disclosed that meetings were held with Emirates’ own bank in Nigeria, in collaboration with the International Air Transport Association (IATA), to discuss improving forex allocation, but with limited success.
The airline said its reduction in flight numbers was a hard decision to take, but promised it would re-evaluate it if the situation turned around for the better.
Meanwhile, the International Air Transport Association (IATA) has accused the Nigerian government of preventing foreign airlines from repatriating the sum of $450 million (about N188.6 billion) earned from ticket sales to their respective countries.
IATA’s Regional Vice President, Africa & Middle East Kamil Al-Alawadhi, said that aviation was key to Nigeria’s economic growth, noting that the aviation sector was responsible for the creation of thousands of jobs and it would be wrong for the Nigerian government to deny carriers the opportunity to repatriate their revenues
Alawadhi stated that cash flow was key for sustainability of aviation business, adding that airlines’ inability to access adequate foreign exchange in Nigeria was a rapidly increasing obstacle.
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