Emirates airlines to reduce flight frequencies to Nigeria over trapped funds – The Sun Nigeria

Dubai’s Emirates plans to reduce flights to Nigeria this month over challenges it is experiencing repatriating revenue from the country, according to a  Reuters report.

The airline in a letter to the Nigerian government said it plans to cut the number of flights to Lagos to seven from 11 by mid-August, a  letter seen by reporters 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 observers say more airlines could follow suit if the Central Bank of Nigeria (CBN), which restricts access to foreign currency to tackle a severe dollar shortage, does nothing to address the airlines’ matters.

“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.

Last week, the naira black market value against the dollar dropped to a record low, raising worries for the CBN. Nigeria, which gets roughly 90 percent of its foreign exchange from oil sales is struggling to produce due to pipeline theft and years of underinvestment.

Amid similar foreign exchange restrictions in 2016, several airlines reduced flights while carriers like Iberia and United Airlines stopped flying to Nigeria altogether. The latter re-launched a Nigerian service last year, but Iberia has yet to return.

The development had prompted the International Air Transport Association (IATA) to say last June that Nigeria was withholding hundreds of millions dollars in revenue that international carriers operating in the country had earned.

Last Friday for instance, the CBN said it is concerned about the falling value of the naira but that it  is making deliberate efforts to avert a further downward slide. The naira has fallen to successive record lows at the parallel market due to dollar scarcity since July 2021, when embargoed forex sales to retail currency traders to ease pressure on reserves and support the official market. The move funnelled demand toward the unofficial market, where the currency is freely traded. The currency has been trading within a range on the official market.

Lawmakers said on Wednesday the policy had “contributed to the excessive scarcity of forex in Nigeria” and summoned Central Bank of Nigeria (CBN) Governor Godwin Emefiele over the “free fall of the naira”.