Emirates To Reduce Operations In Nigeria Due To ₦60 Billion Trapped Revenue
Emirates Airlines, one of two flag carriers of the United Arab Emirates, has said it will reduce its flight operations to Nigeria due to its inability to repatriate about ₦60 Billion ($85 million) in revenue.
The airline made this known in a letter it wrote to the Nigerian Minister of Aviation, Senator Hadi Sitika, dated July 22 2020 and signed by Sheik Majid Al Mualla, the DSVP International Affairs.
Emirates said the planned reductions in its operations in Nigeria would take effect from August 15.
It added that flights would be reduced from 11 per week to seven at the Murtala Muhammed International Airport (MMIA).
“We have had no choice but to take this action, to mitigate the continued losses Emirates is experiencing as a result of funds being blocked in Nigeria,” the letter said.
“As of July 2022, Emirates has US$ 85 million of funds awaiting repatriation from Nigeria. This figure has been rising by more than $US 10 million every month, as the ongoing operational costs of our 11 weekly flights to Lagos and 5 to Abuja continue to accumulate.
“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 Nairas, 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.
“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.”
“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.”