CBN policy threatens Nigerian Aviation, Emirates reduces service over $85m debt

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Emirates-Airline

Emirates Airline (file photo)

‘We have no choice but to take this action, to mitigate the continued losses Emirates is experiencing’

By Valentine Amanze

More troubles for the Nigeria Aviation industry as Dubai’s Emirates airlines will this month (August) reduce operations in the West African country over $85 million debt.

The company has also written to the Nigerian government  that it was having troubles repatriating revenue from Africa’s most populous nation, according to Reuters.

Reuters also disclosed on Monday that Emirates would, by mid-August, cut the number of flights to Lagos to seven from 11, stressing that it had $85 million stuck in the country as of July, a figure that had been rising by $10 million per month.

The management of Emirates confirmed its seriousness to cut measures in a letter it wrote to Nigeria’s Aviation Minister, Hadi Sirika, on July 22, 2022.

“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.”

A spokesperson for the aviation ministry did not reply to a request for comment.

Emirates, in an emailed statement, explained that 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 that it hoped to continue a full schedule.

Meanwhile, industry observers foresee more airlines could follow suit if the Central Bank of Nigeria (CBN), which restricts access to foreign currency to tackle a severe dollar shortage, did not address airlines’ issues.

Last week, the naira’s black market value versus the dollar dropped to a record low. The CBN 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 and mismanagement.

Amid similar foreign exchange restrictions in 2016, several airlines reduced flights and carriers such as 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 International Air Transport Association said in June Nigeria was withholding hundreds of millions in revenue that international carriers operating in the country had earned.

 

valoa2000@yahoo.com

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