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Following a situation where the funds of foreign airlines were trapped in Nigeria, some carriers have reduced or threatened to reduce their services to the country. One of these airlines is Gulf carrier Emirates, which suspended all flights as late as yesterday. However, it has now announced it will resume operations again on September 11, following the decision of the Central Bank of Nigeria (CBN) to release $256 million - a little under half - of the blocked funds.

At least $85 million of Emirates funds blocked

Emirates usually operates 11 weekly flights to Abuja's Nnamdi Azikiwe International Airport and Lagos' Murtala Muhammed International Airport. However, by mid-August, the Dubai-based carrier had reduced the number to seven. In July, the airline had $85 million from ticket sales stuck in the country. This figure had been rising by $10 million per month due to the CBN's restriction of access to foreign currency in order to tackle a severe dollar shortage.

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Furthermore, the airline then stated it would suspend operations to Nigeria altogether on September 1. When the suspension took effect yesterday, the airline closed its website and the platform for travel agents for new ticket sales. However, following the CBN's decision a week ago to release some of the funds belonging to airlines, Emirates issued the following statement,

"Emirates welcomes the Central Bank of Nigeria's move to release a portion of our blocked funds, and we continue to engage with the Nigerian authorities to ensure the repatriation of our outstanding and future funds may continue without hindrance. In light of these developments, Emirates will reinstate flights to/from Lagos from 11 September, which is the earliest date for us to coordinate the smooth and safe resumption of operations. It will also provide travellers with sufficient time to plan and book their journeys."

Not alone in reducing flights

Nigeria has blocked airlines from repatriating a total of $464 million from ticket sales in the country. Delta Air Lines and British Airways have also threatened to suspend some services to Nigeria as a result of their funds being held. Unless circumstances change before then, Delta will stop operating its New York to Lagos route at the beginning of October, although it will keep flying from Atlanta. BA, on the other hand, has set a deadline of December 1. Until then, the airline will only sell tickets in dollars, instead of the local naira, and only online.

IATA's Regional Vice President, Africa & Middle East, Kamil Alawahdi, said the organization welcomed the Nigerian government's partial release of the blocked funds and would continue to advocate for the remaining amount to find its way to the airlines. He further stated,

“We encourage other countries, in Africa and elsewhere, that are blocking the repatriation of foreign airlines’ funds, to follow Nigeria’s example and release the money they are withholding. Without it, airlines cannot afford to serve those countries. This would be detrimental to the people and businesses that depend on the market connectivity those airlines provide. IATA speaks and leads the industry on matters of common interest. While IATA cannot speak for individual airlines, we hope the release of blocked funds with assurances and safeguards to prevent a recurrence, will persuade affected carriers to continue serving Nigeria.”

Repeat situation from six years ago

This is not the first time Nigeria finds itself with reduced service as a result of withholding funds. During similar foreign exchange restrictions in 2016, several airlines reduced their schedules, whereas Iberia and United Airlines stopped flying altogether. The Spanish flag carrier still has not returned.

Source: Daily Trust, Reuters, Vanguard