DAILY COURIER – Due to its inability to repatriate its blocked funds from Nigeria, Emirates Airlines is planning to cut its operations from Dubai to Lagos from 11 per week to 7 per week, starting from August 15th, 2022.
Emirates is one of two flag carriers of the United Arab Emirates. The other being Abu Dhabi-based Etihad Airways.
The International airline plan was contained in a letter addressed to the Honourable Minister of Aviation, Federal Ministry of Aviation, dated July 22, 2022.
In the letter signed by Sheikh Majid Mualla, DSVP International Affairs, it stated that, “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.”
According to Emirates, “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.”
Stating that the funds are urgently needed to meet their operational costs and maintain the commercial viability of their services to Nigeria, Emirates added “We simply cannot continue to operate at the current level in the face of mounting losses, especially in the challenging post COVID-19 climate.”
Explaining further, the airline stated that they tried to stem the loss by proposing to pay for fuel in Nigeria in Nairas, which would have at least reduced costs; however, this request was denied by the supplier.
“This means that not only Emirates revenues accumulating, we also have to send hard currency into Nigeria to sustain our operations. 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 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 with Emirates own bank in Nigeria and in collaboration with IATA to improve FX allocation, but with limited success”, Emirates stated.
Earlier, aviation experts had warned that if urgent steps were not taken to work out a mechanism to clear the existing backlog of trapped funds of foreign airlines and prevent subsequent build up, such funds may hit $300 million in the second quarter of 2022.
With the increasing build up of foreign airlines trapped funds, it is increasingly becoming more difficult for some of the carriers to access funds through their banks at official rate.
Although, the foreign airlines had resorted to the black market to source forex at a point in time.
Meanwhile shortage of foreign exchange in the country has been attributed to be one of the major reasons why foreign airlines are unable to repatriate the blocked funds out of the country, a situation that had forced airline operators to seek for alternative means of raising funds.