Emirates Airline has suspended all flights to Nigeria as it struggles to return funds

Emirates announced in a statement on Thursday that it has suspended flight operations in and out of Nigeria due to the West African country’s inability to return funds.

The airline said there has been “no progress” in reaching out to Nigerian authorities for a solution.

“Emirates has tried all avenues to address our ongoing challenges in repatriating funds from Nigeria and has made considerable efforts to initiate dialogue for the urgent intervention of relevant authorities to help find a workable solution,” a statement said.

The decision comes after Emirates announced last month that it would reduce flights to Nigeria’s commercial capital Lagos, after the carrier said it could not access $85 million in cash held back in the country. The airlines said in a letter to Nigeria’s Minister of Aviation, Hadi Sirika, that the stuck funds are increasing by more than $10 million every month.

Currency in freefall

Sirika told CNN that the seized funds would be released, and this is not the first time Nigeria has withheld large amounts of revenue belonging to foreign air carriers.

“In the past, Nigeria has demonstrated the ability and willingness and legitimacy to solve this kind of problem. This happened when we assumed power in 2015: at that time about $600 million of funds were blocked. The country was in recession and the revenue coming into the country was dwindling, yet we honored our obligation to pay all the blocked funds” Sirica told CNN on Thursday.

“Unfortunately, due to many factors and reasons, the funds came back. The government is working hard to ensure the release of these funds, not only to Emirates but to all airlines affected,” Sirika added.

Sirika said a mechanism will be put in place to ensure this does not happen in future.

Although Nigeria is suffering from a shortage of foreign exchange that has restricted access to foreign currency for importation, the minister did not elaborate on the factors.
In June, the International Air Transport Association said Nigeria had $450 million in revenue belonging to foreign carriers operating in the country.
The local currency has freely depreciated against the dollar, with the country deriving most of its foreign exchange from crude oil sales, which has weakened due to oil theft in producing communities. The government is also burdened by the high cost of subsidizing fuel for local consumption.

Nigeria is one of Africa’s largest markets for international carriers.

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