Emirates Airlines has once again suspended its flight operation to Nigeria due to failure to repatriate the company’s earnings trapped alongside other foreign airlines funds.
A statement issued by the company said the suspension took effect from October 29 2022.
The alarm of the trapped fund, which amounts to more than $500 million, was raised in June by the International Air Transport Association (IATA). The organization had described talks with the Nigerian government respecting the repatriation as a “hectic ride”.
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Emirates’ share of the fund is $85 million. The company had in August suspended its operation to Nigeria, in a push to get the government to act.
The Central Bank of Nigeria (CBN), which later intervened – releasing $265 million to the affected airlines, attributed the unfortunate situation to Nigeria’s forex crisis. Aviation Minister Hadi Sirika said it is not the first time Nigeria was withholding funds belonging to foreign airlines but there are efforts to see that the funds are released. The CBN had promised to release another $120 million to the international carriers to offset part of the trapped funds by the end of October. But according to the United Arab Emirates’ national carrier, the central bank has not lived up to that promise, forcing the company to suspend its flight services to Nigeria once again.
Emirates said in a statement that it can longer continue operations to Nigeria as that will result in accumulation of its trapped funds.
“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 of 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 do 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,” the statement said.
Other airlines affected are also contemplating towing the path of Emirates. IATA said in August that the government’s delay in repatriating the fund is causing more damage.
“Airlines can’t be expected to fly if they can’t realize revenue from ticket sales. Loss of connectivity harms the economy, hurts investor confidence, impacts jobs and people’s lives. The Government of Nigeria needs to prioritize the release funds before more damage is done,” IATA said.