Emirates Reduces Nigeria Service, Blames $85m Trapped Revenue

Dubai’s Emirates has announced reduction in flights to Nigeria this month due to troubles repatriating revenue from Africa’s most populous nation.

Emirates, according to a letter sent to the government and seen by Reuters, plans to cut the number of flights to Lagos to seven from 11 by mid-August, the letter said, adding it had $85 million stuck in the country as of July, a figure that had been rising by $10 million per month.

Industry watchers predict that 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.

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 dollar dropped to a record low and the central bank said it was worried about the naira’s value.

Nigeria, which gets roughly 90 percent of its foreign exchange from oil, is struggling to produce due to pipeline theft and years of underinvestment.

Amidst 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.

Earlier, the International Air Transport Association said in June that Nigeria was withholding hundreds of millions in revenue that international carriers operating in the country had earned.