Emirates reduces flights to Nigeria over $85m unpaid revenue

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Emirates Airlines, flag carrier of the United Arab Emirates (UAE), says it will reduce its flight operations to Nigeria from 11 to 7 over the inability to repatriate about $85 million in revenue.

The airline said this in a letter addressed to Hadi Sirika, minister of aviation, dated July 22, 2020, and signed by Sheik Majid Al Mualla, Emirates airline’s divisional senior vice-president (DSVP), international affairs. 

the airline added that the planned reductions in its operations in Nigeria would take effect from August 15, 2022.

Last month, the International Air Transport Association (IATA) said Nigeria was withholding revenue worth about $450 million earned by foreign airlines operating in the country. 

The airline, which said the fund has been rising by over $10million every month, as its operational cost continues to accumulate, said its proposal to pay for aviation fuel in local currency was also rebuffed by fuel suppliers in Nigeria.

The letter reads, “It is with a heavy heart that I write to inform you of planned reductions in Emirates’ operations to Nigeria. 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 US$85 million of funds awaiting repatriation from Nigeria. This figure has been rising by more than $US10 million every month, as the ongoing operational costs of our 11 weekly flights to Lagos and 5 to Abuja continue to accumulate.

“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 did try to stem the losses by proposing to pay for fuel in Nigeria in Naira, which would have at least reduced one element of our ongoing costs, however this request was denied by the supplier.”

He further disclosed that sending in foreign exchange to run its operations in Nigeria daily is further affecting Emirates’ profit margins, but promised to return to normal flight operations if it was able to reclaim its trapped fund.

“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.

“While we appreciate that this issue is primarily a financial one, any support you could kindly provide would be warmly welcomed by Emirates. We are confident that your valuable involvement would make a real difference in improving this very difficult situation.

“Should there be any positive development in the coming days, we will of course re-evaluate this decision. Meanwhile thank you for your understanding and please feel free to contact me if you wish to discuss the matter further,” Al Mualla stated.




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