EMIRATES TO SCALE BACK FLIGHTS TO NIGERIA OVER UNPAID $85M, FOREIGN EXCHANGE SHORTAGE
Emirates has stated it’s going to minimize its variety of weekly flights to Lagos, Nigeria, from 11 to 7 as a result of $85 million in unpaid payments caught within the nation and the unavailability of international change
Emirates stated that except options to its challenges in Nigeria are discovered instantly, its determination will take impact on August 15, 2022.
In a letter from Emirates Divisional Senior Vice President (DSVP) Sheikh Majid Al Mualla to Nigerian Aviation Minister Senator Hadi Sirika, a replica of which LEADERSHIP obtained, the airline stated it has been tough to recuperate its trapped fund. and the cash was essential to run their operations.
The airline, which stated the fund has elevated by greater than $10 million every month as its working price continues to mount, stated its proposal to pay for jet gasoline in native foreign money was additionally rejected by gasoline suppliers in Nigeria.
The letter reads: “It’s with a heavy coronary heart that I write to tell you of deliberate reductions in Emirates operations in Nigeria. As of August 15, 2022, Emirates might be pressured to cut back flights from Dubai to Lagos from 11 to 7 per week.
We’ve had no selection however to take this motion to mitigate the continuing losses that Emirates is experiencing on account of the blocking of funds in Nigeria
As of July 2022, Emirates has US$85 million in funds awaiting repatriation from Nigeria. This determine has elevated by greater than $10 million each month, as the continuing working prices of our 11 weekly flights to Lagos and 5 to Abuja accumulate.
“These funds are urgently wanted to cowl our working prices and preserve the business viability of our companies to Nigeria. We merely can not proceed to function at present ranges within the face of mounting losses, particularly within the difficult post-COVID-19 local weather.
“Emirates tried to curb losses by proposing to pay for gasoline in Nigeria in Naira, which might have decreased a minimum of one aspect of our ongoing prices, nevertheless the provider refused this request.”
He additional revealed that sending international foreign money day by day to run its operations in Nigeria is additional affecting Emirates’ revenue margins, however promised to return to regular flight operations if he may recuperate his trapped fund.
“We additionally must ship exhausting foreign money to Nigeria to assist our personal operation. In the meantime, our earnings is out of our attain and doesn’t even generate credit score curiosity.
“Your Excellency, this isn’t a call we’ve taken frivolously. In actual fact, we’ve accomplished our greatest to work with the Central Financial institution of Nigeria (CBN) to discover a resolution to this drawback. Our Senior Vice President met with the CBN Deputy Governor in Could and adopted up on the assembly with a letter to the Governor himself the next month, nevertheless no constructive response was acquired.
“Conferences had been additionally held with Emirates’ personal financial institution in Nigeria and in collaboration with IATA to debate enhancing international change allocation, however with restricted success.
“Regardless of our appreciable efforts, the state of affairs continues to deteriorate. We at the moment are within the unlucky place of getting to chop flights to mitigate additional losses sooner or later.
“Whereas we recognize that this situation is primarily a monetary one, any assist you possibly can kindly present could be significantly appreciated by Emirates. We’re assured that your invaluable enter will make an actual distinction in enhancing this very tough state of affairs.
“If there are any constructive developments within the subsequent few days, we are going to in fact re-evaluate this determination. Within the meantime, thanks on your understanding and please don’t hesitate to contact me when you want to focus on the matter additional,” Al Mualla said.