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Emirates has announced that it will suspend flights to Nigeria from September 1st after failing to repatriate $85 million in ticket revenues from the country. Given the fallen value of the local currency, and presumably, to amp up pressure on the government, the Dubai-based airline is hoping to limit further losses. So what is going on?

Emirates is one of many

Nigeria is currently in the midst of a foreign currency crisis, with the weakening economy causing the naira to depreciate. To prevent a further drop in the currency, the government has blocked foreign carriers from repatriating their revenues from the nation. This has left Emirates unable to access nearly $85 million sitting in the country currently, according to The Cable.

However, Emirates is not alone in its struggle, with IATA estimating that $450 million in foreign airline earnings are stuck in Nigeria. With no headway being made in a bid to recover the funds, Emirates has announced it will cease to serve Nigeria until it can receive its dues. The airline is projected to cease flights to the country from September 1st.

The decision to announce a seizure of flights in September instead of sooner is also a negotiating tactic. Emirates added in its statement that,

"Should there be any positive developments in the coming days regarding Emirates’ blocked funds in Nigeria, we remain keen to serve Nigeria, and our operations provide much-needed connectivity for Nigerian travellers, providing access to trade and tourism opportunities to Dubai, and to our broader network of over 130 destinations.”

This means not all hope is lost and the flights will resume as soon as Emirates can receive its $85 million, government permitting.

Rare instance

It is rare for an airline to publicly pull flights from a country over repatriation disputes. However, Emirates has spent months negotiating with the Nigerian government to access its revenues, including to a letter to the Minister of Civil Aviation last month. In it, the carrier said that it does not have access to $10 million in earnings every month and is forced to pay for fuel in USD as well, meaning it has to fly in currency to continue operations.

Without free repatriation of funds, Emirates is effectively losing every dollar of revenue it generates in Nigeria, an untenable position in a market so large. After cutting flights from 11 to seven in August, it has now decided that continuing flights further will only deepen losses.

The move also risks infuriating the Nigerian government, which has publicly fought the airline over the last two years. Issues have ranged from slot refusals to allegedly discriminatory COVID requirements for passengers. However, with multiple airlines in a similar position, more could decide to pull out to pressure the government to act as well.

For now, the next 13 days will determine if Emirates suspends Nigeria flights only six months after returning after the pandemic.

What do you think about Emirates' decision to suspend flights to Nigeria over blocked earnings? Let us know in the comments!

Source: The Cable