Emirates said in a statement on Thursday that it had suspended operations to and from Nigeria due to its inability to repatriate funds from the West African country.
The airline said there had been “no progress” in reaching Nigerian authorities for a solution.
“Emirates has explored all avenues to address our ongoing challenges in repatriating funds from Nigeria and has made significant efforts to engage in dialogue with the relevant authorities so that they can urgently intervene and find a viable solution. Regrettably, there has been no progress,” Emirates said in a statement.
The decision comes after Emirates last month announced plans to reduce flights to Nigeria’s commercial capital Lagos. The airline said it could not access its $85 million in in-country funds. The stalled funds have increased by over $10 million each month, the airline said in a letter to Nigerian Aviation Minister Hadi Sirika.
currency in free fall
Sirika told CNN that the trapped funds will be released as this is not the first time Nigeria has been stuck with huge foreign airline revenues.
“Nigeria has a history of showing the ability, will and fairness to resolve these types of issues. It happened when we took power in 2015: there was a lot of blocked funds, about $600 million at the time, when the country was in a recession and dwindling revenues came into the country, but we delivered on our commitment, all of those blocked funds paid out,” Sirika told CNN on Thursday.
“Unfortunately, the funds have been piling up again due to many factors and reasons. The government is working hard to get these funds released, not just for Emirates but for all airlines affected,” Sirika added.
Sirika added that “mechanisms are being put in place to ensure that this does not happen again in the future”.
The minister did not elaborate on the factors, although Nigeria is struggling with foreign exchange shortages that limit access to foreign currency for imports. In early June, the International Air Transport Association said Nigeria is holding on to $450 million in revenue owned by foreign airlines. The local currency has been in free fall against the dollar, with most of the country’s foreign exchange coming from the sale of Crude oil, which has shrunk due to oil theft in producing communities. The government is also burdened with the high cost of subsidizing fuel for local consumption.
Nigeria is one of Africa’s largest markets for international airlines.