• Market Watch

Emirates plans to reduce Nigeria service

- 2022-08-03 00:00:00

Libby George - Dubai's Emirates plans to reduce flights to Nigeria this month due to troubles repatriating revenue from Africa's most populous nation, according to a letter sent to the government and seen by Reuters.
Emirates plans to cut the number of flights to Lagos to seven from 11 by mid-August, the letter said, adding it had US$85 million stuck in the country as of July, a figure that had been rising by US$10 million per month.
Industry observers say more airlines could follow suit if the central bank, which restricts access to foreign currency to tackle a severe dollar shortage, did not address airlines' issues.
"We have no choice but to take this action, to mitigate the continued losses Emirates is experiencing as a result of funds being blocked in Nigeria," it said in a letter to aviation minister Hadi Sirika dated July 22.
A spokesperson for the aviation ministry did not reply to a request for comment.
COMMERCIAL VIABILITY
Emirates, in an emailed statement, said trouble repatriating funds was impacting its commercial viability in Nigeria and that efforts to solve the problem had been met with limited success.
Emirates did not comment directly on the letter and said it hoped to continue a full schedule.
Last week, the naira's black market value versus the US dollar dropped to a record low. The central bank said it was worried about the naira's value.
Nigeria, which gets roughly 90% of its foreign exchange from oil, is struggling to produce due to pipeline theft and years of underinvestment.
Amid similar foreign exchange restrictions in 2016, several airlines reduced flights and carriers Iberia and United Airlines stopped flying to Nigeria altogether. The latter re-launched a Nigerian service last year, but Iberia has yet to return.
The International Air Transport Association said in June Nigeria was withholding hundreds of millions in revenue that international carriers operating in the country had earned. - Reuters