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IATA has lamented Nigeria’s lack of action to deal with the repatriation of airline funds, after Emirates announced it would suspend the country from 1 September due to the issue.
Airline cash blocked through Nigeria’s government rose to $464 million in July, IATA said on Aug. 18, cementing Africa’s largest economy as a world leader in this regard. Its total has grown in recent months, reaching $282 million in April.
For Emirates, it is no longer sustainable.
“Emirates has tried by all means to address our existing demanding situations in the repatriation of Nigeria’s budget, and we have made great efforts to have an interaction in the discussion with the relevant government for its urgent intervention to find a viable solution,” he said on the 18th. August.
“Unfortunately, there has been no progress,” he continued. As a result, Emirates took the difficult decision to suspend all flights to and from Nigeria, effective 1 September 2022, to restrict additional losses and have an effect. “about our operating prices that continue to be collected in the market. “
IATA believes the Nigerian government deserves to do more for the situation.
“You can’t expect airlines to fly if they can’t make a profit from selling price tickets,” he says. “The loss of connectivity damages the economy, damages investor confidence, affects jobs and people’s lives.
“The Nigerian government will have to prioritize the release of the budget before further damage occurs.
Emirates says it will reconsider its decision to proceed with the Service of Nigeria, “in view of positive developments in the coming days in relation to Emirates’ blocked funds”.
Nigeria’s Federal Ministry of Aviation has been reached for comment.
At its annual general meeting in June, IATA said the frozen budget in Nigeria (then about $450 million) represented at least 25% of the global total, which amounted to $1600 million. African countries accounted for two-thirds of this overall figure, with Zimbabwe, Algeria, Eritrea and Ethiopia also hotspots across Nigeria.
“This will reach the point where the traveler will no longer be able to travel and the aviation industry will collapse inside and outside Nigeria,” said IATA’s regional vice president for Africa and the Middle East, Kamil Al-Awadhi, referring to the rise in ticket prices that has accompanied remittance problems and the weakness of the local currency.
However, despite demanding situations similar to the blocked funds, knowledge of Cirium’s schedule suggests that, at least for now, a long list of foreign airlines will continue to provide services to Nigeria in September, with Qatar Airways, Ethiopian Airlines, Delta Air Lines, Turkish Airlines, British Airways and Lufthansa among those providing maximum capacity.
Remittances are linked to Nigeria’s low foreign exchange reserves.
Nigeria gets the most of its foreign exchange from crude oil sales, which have been lower than expected this year for reasons such as growing theft of goods, according to local reports, leading to a shortage of U. S. dollars in the country.
Nigeria faced a similar currency shortage in 2016, with a locked airline budget reaching at least $600 million at the time. This scenario was eventually mitigated, thanks in part to the government’s resolve to move away from a constant exchange rate for Nigerian naira, with IATA confirming in mid-2018 that the budget had been repatriated.
But the repatriation of remittances is a constant challenge for the airline industry.
Before Covid, Venezuela had high-profile struggles in this area, and the problems contributed to a drop in the number of foreign carriers serving the country over the past decade.
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