Emirates confirmed on Thursday that it has suspended all of its flights to Nigeria because the Nigerian government is continuing to block the airline from removing millions of dollars in revenue from the African country.
The Dubai-based carrier last operated a flight to Lagos on October 28, and there are currently no scheduled flights by Emirates between Dubai and Nigeria for the foreseeable future.
The International Air Transporation Association (IATA) estimates that the value of blocked funds across the industry has surged by 27 per cent in the last six months with around $1.85 billion in blocked revenue now impacting a number of international airlines.
Some of the worst offenders, according to IATA, are Nigeria, Pakistan and Egypt. Also on IATA’s watch list of block fund offenders are Ukraine and Russia.
Earlier this year, Emirates estimated that it had around $85 million in revenues trapped in Nigeria. The airline previously suspended flights to Nigeria in September after threatening to pull out of the country unless the blocked funds were released.
Emirates returned to the country just a couple of weeks later after Nigeria’s central bank promised to return a portion of the airline’s blocked funds. It turns out, however, that Nigeria never actually released any of the funds that it promised to hand over.
“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,” a spokesperson told the Khaleej Times on Thursday.
“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.”
A spokesperson described the situation as “untenable” and said airline officials had met with Nigerian government officials on several occasions in an attempt to get the funds released.
Emirates had demanded 80 per cent of its blocked funds to be released by the end of October but is yet to receive a cent.
Striking a conciliatory tone, however, a statement from the airline continued: “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”.
So far, Emirates is the only airline to have abandoned Nigeria over the issue, although other international carriers including Turkish Airlines, KLM and British Airways are also believed to be trying to secure the release of trapped funds.
But, but, but… aren’t there some wealthy Nigerian princes in the country who need to put their funds to work and would gladly loan money to the government? =)