Emirates cuts Lagos service over $85m in revenue awaiting repatriation

In response to an alleged failure by Nigeria to repatriate revenue from ticket sales, Emirates announced it would cut several flights to Nigeria. The airline says more than $85 million of its revenue comes from the state of Nigeria. The state responded by stating that it was withholding these funds to better support its economy.

A letter of dissatisfaction

Emirates will reduce its flights from Dubai to Nigeria from eleven weekly flights to just seven, effective August 15, 2022. It says it will be an attempt to mitigate revenue losses as the state of Nigeria holds back currently over $85 million in revenue belonging to the Emirates. Due to these withheld profits, the airline reports a lack of sufficient funding to continue operations in Lagos on the same scale.

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Emirates will reduce flights to Nigeria in a mitigation bid to reduce lost profits. Photo: Vincenzo Pace | single flight

The airline sent a letter on July 22, 2022 to Senator Hadi Sitika, Nigerian Minister of Aviation, on the matter. The letter stated that more than $85 million in revenue was held by the Nigerian state. The number has increased by 10 million each month due to rising operational costs imposed on the carrier. The airline addressed the rising costs in the letter when it said,

“We simply cannot continue to operate at the current level in the face of mounting losses, especially in the difficult post-COVID-19 climate. Emirates tried to stem the losses by offering to pay for fuel in Nigeria in naira, which would have reduced at least one element of our ongoing costs, but this request was refused by the supplier. This means that not only does Emirates’ revenue accrue, but we also have to send hard currency to Nigeria to support our own operations. Meanwhile, our income is out of reach and doesn’t even earn credit interest.

Emirates approached the Central Bank of Nigeria in hopes of resolving this issue, but no positive response was forthcoming from the bank. He also noted that if the Minister of Aviation responds positively to this request, he would potentially reverse his earlier decision and avoid reducing flights.


IATA responds

The International Air Transport Association of Nigeria (IATA) has responded to Emirates’ claims saying that these measures are necessary to ensure continued travel for Nigerian passengers. He claims that Nigerian travelers are charged much more by international airlines than passengers from other African countries in a bid to make a higher profit.

Nigeria is not the only country to retain significant revenues belonging to international air carriers. Zimbabwe is the African country with the second largest foreign airline revenue portfolio totaling over $100 million. Nigeria took the top spot on this list when in June 2022, IATA reported that Nigeria was currently withholding over $450 million in revenue belonging to foreign airlines.


IATA says international airlines, including Emirates, charge Nigerian passengers more than those from other African countries. Photo: Getty Images

IATA has released a statement saying that these rising air travel costs imposed on passengers will eventually cause an economic collapse. He claims that by retaining these profits, he has managed to stabilize the country’s international travel. He stated,

“The average Nigerian traveler is paying the price as air fares in Nigeria have increased; so it does not help the average Nigerian to travel. The price (tariffs) is two to three times higher. There will come a time when Nigerians will no longer be able to travel. There will come a time when the Nigerian economy will collapse,”

Emirates has decided to cut flights to Nigeria due to the Nigerian state withholding more than $85 million in revenue. He claims he can no longer operate profitable flights to Nigeria without collecting the revenue owed to him. IATA responded by stating that Nigerians are being charged unfairly and that it needs to withhold revenue to support its economy.


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Source: today