November 3, 2022

$700m Trapped funds: Again, Emirates Airline suspends operation in Nigeria indefinitely

Emirates Airlines ready to partner Nigeria on national carrier

…As BA retime operation to Abuja

By Prince Okafor

The United Arab Emirates, UAE, flag carrier, Emirates Airline, has suspended inbound and outbound Nigeria flight operations indefinitely.

This is coming barely seven weeks after the airline restarted its operation in the country, following its inability to repatriate over $85 million in revenue generated from sales of air tickets.

Vanguard Aviation World had reported that despite the intervention by the Central Bank of Nigeria, CBN, the volume of trapped funds is still rising, hitting $700 million, about 51 percent from the $346 million in September, 2022.

Foreign airlines collect Naira for their tickets to customers and exchange the same for foreign currencies for their operations. But recently they said they have been unable to get the exchange executed through the official foreign exchange market due to scarcity of foreign exchange resources.

However, at the backdrop of this development, the CBN, Governor, Godwin Emefiele, while speaking during a meeting between the House of Representatives, International Air Transportation Association (IATA), Airlines Operators of Nigeria (AON), and representatives of the federal government, said: “Everyone is calling on CBN to release blocked funds, and I am doing everything I can to provide dollars for you to repatriate your money.

 “We used our discretion to allocate $265 million to the foreign airlines, broken down into spot and forward. We did $110 million on the spot and the rest in 60 days forward.

Meanwhile, the management of the airline in a statement made available to Vanguard Aviation World, stated that the suspension took effect from October, 29 2022.

The company disclosed that despite promises of allocation by CBN, nothing has been done.

The statement read: “Emirates has continued to actively seek a solution for the repatriation of the remainder of its blocked funds in Nigeria. We were encouraged by the Central Bank of Nigeria’s efforts of reviewing our request, and considered that this critical issue would be swiftly resolved with the subsequent clearance of our remaining funds.

 “However, Emirates has yet to receive an allocation of our blocked funds to be repatriated. Without the timely repatriation of the funds and a mechanism in place to ensure that future repatriation of Emirates’ funds do not accumulate in any way, the backlog will continue to grow, and we simply cannot meet our operational costs nor maintain the commercial viability of our operations in Nigeria.

“We have officially communicated our position and attended multiple hearings with the Nigerian government, and we have made our proposed approach clear to alleviate this untenable situation, including a plan for the progressive release of our funds. This included the repatriation and receipt of at least 80 percent of our remaining blocked funds by the end of October 2022, in addition to providing a guaranteed mechanism to avoid future repatriation accumulation challenges and delays.

“Under these extraordinary circumstances Emirates had no option but to suspend flights to/from Nigeria from 29 October 2022 to mitigate against further losses moving forward.

“We hope to reach a mutual resolution with the Nigerian government around the repatriation of blocked funds to enable the resumption of operations and connectivity for travellers and businesses.”

BA retime operation to Abuja

In another development, British Airways has retimed its operation to Abuja.

The airline’s Public Relation manager, Josephine Simmons, told Vanguard Aviation World, in a chat that safety remains BA’s highest priority.

She said: “Our route continues to operate, following a change to the Foreign, Commonwealth and Development Office, FCDO advice to Abuja, we have taken the decision to retime our operation to Abuja.”

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