Emirates Airlines has announced the suspension of flight operations to Nigeria over its inability to repatriate trapped funds in the country.
This is the second time in less than 2 months the airline will be halting flight operations in Nigeria over the difficulty in repatriating its funds.
According to a monitored report from Channels Television, this disclosure is contained in a statement issued by Emirates Airline on Thursday, saying that the suspension took effect from October 29, 2022.
The airline said it has communicated its position to the federal government and the Central Bank of Nigeria (CBN).
Emirates, in the statement, said despite promises and encouragements from the CBN to address its foreign exchange requests, no allocation has been made to them.
Emirates’ position
- 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 foreign exchange crisis, the federal government was reported to have released $265 million to the airlines operating in the country to settle outstanding ticket sales.
Recall that earlier in August, Emirates Airline had said that it would suspend flight operations to Nigeria from September over its inability to repatriate its over $85 million revenue from the country, a decision that highlights the difficulties faced by international carriers that fly to the country.
Nigerians have restricted access to foreign currency for imports and investors seeking to repatriate their profits due to a shortage of dollars. Nigeria gets about 90% of its foreign exchange from oil but is struggling to produce and earn foreign exchange due to pipeline vandalism and oil theft.
