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Wed, Aug 03, 2022

Emirates Reduces Service to Africa Over Revenue Repatriation

Hurry Boy, It’s Waiting There For You

Emirates, the world’s fourth-largest airline and one of the United Arab Emirates’ two flag-carriers, has announced the imminent cutting of over 44% of the airline’s flights to Nigeria—Africa’s most populous and second wealthiest nation.

The service reduction is attributed to the Nigerian state’s withholding of over $85-million of the air-carrier’s profits. Emirates states the curtailment of flights to Lagos—Nigeria’s largest city and former capital—represents both the airline’s attempt to mitigate further revenue losses, and its inability to sufficiently fund large-scale operations to Lagos against $85-million in unrealized profits.

In a letter to Nigerian Minister of Aviation Hadi Sitika, Emirates asserted that not only was over $85-million of its revenue being held captive by the Nigerian state, but that the number had been climbing by $10-million per month amid rising operational costs placed on the airline in the wake of global economic downturn.

To the subject of rising costs, Emirates put forth: “We simply cannot continue to operate at the current level in the face of mounting losses, especially in the challenging post COVID-19 climate. Emirates did try to stem the losses by proposing to pay for fuel in Nigeria in naira, which would have at least reduced one element of our on-going costs, however this request was denied by the supplier. This means that not only are Emirates’ revenues accumulating, we also have to send hard currency into Nigeria to sustain our own operations. Meanwhile, our revenues are out of reach and not even earning credit interest.”

In response to Emirates’ overtures to recoup its monies, Nigeria’s International Air Transport Association leveled a series of specious allegations against the air-carrier, contending that Emirates—in cahoots with unnamed additional international airlines—has selectively targeted Nigerian travelers with higher fares for purpose of maximizing profits.

Nigeria’s IATA further alleged that [purportedly] rising air travel costs will ultimately precipitate the collapse of Nigeria’s economy. The association claims that by withholding Emirates’ profits, Nigeria has stabilized its citizens’ ability to travel internationally.

“[The] Average Nigerian traveler is paying the price, as airfares in Nigeria have increased; so, it is not helping the average Nigerian to travel,” IATA of Nigeria averred. “The price [airfare] is two to three times higher. It will come to a time Nigerians will not be able to travel. It will come to a time it will collapse Nigeria’s economy.”

In the hope of resolving the $85-million issue, Emirates addressed the Central Bank of Nigeria, albeit to no avail. The airline also declared willingness to resume the full complement of its flights to Lagos were Nigeria’s Minister of Aviation to incline to the airline’s point of view—again to no avail.

FMI: www.emirates.com

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