Will airlines stay after Nigeria frees $265 million of foreign airline revenues?

Nigeria’s aviation industry has breathed a sigh of relief after the Central Bank of Nigeria (CBN) released $265 million to foreign airlines operating in the country to settle outstanding ticket sales.

The total sum released to foreign airlines comprised $230 million, which was released as a “special FX intervention”, and a further $35 million released through a “Retail SMIS auction”, according to an announcement by the CBN on Twitter.

The CBN hopes that its action will help settle the turbulent situation within Nigeria’s aviation sector, where up to $464 million of foreign airlines revenues were reported to be blocked from repatriation.

“With Friday’s release, it is expected that operators and travelers as well will heave huge sighs of relief, as some airlines had threatened to withdraw their services in the face of unremitted funds for outstanding sale of tickets,” said the CBN in a Sahara Reporters report.

In a statement issued to AeroTime, the International Air Transport Association (IATA) welcomed the Nigerian Government’s release of $265 million of airlines’ blocked funds and urged the full renumeration of the outstanding amounts.

“We will continue to engage with it (Nigerian Government) on expediting the release of the remaining amount, so that airlines can continue providing the connectivity Nigeria requires without disrupting and harming its economy and jobs,” said IATA in the statement.

Emirates tentatively reinstates operations to Nigeria with limited capacity
On August 28, 2022, Emirates notified travel agents that it would reinstate operations to Nigeria, but for a limited time and with limited capacity, according to a BusinessDay report.

“Operations to Nigeria will be reinstated with 4-weekly Lagos (LOS) flights effective 11 September 2022. Lagos flights beyond 30th September will be advised in due course,” said the airline in a travel circular sent to travel agents that was seen by BusinessDay.

The Emirates’ website only shows flight schedules between Dubai International Airport (DXB) and Murtala Muhammed Airport (LOS) from September 11, 2022, to September 30, 2022.

No flight schedules to Abuja Nnamdi Azikiwe International Airport are present on Emirates website after August 31, 2022.

However, Emirates’ new four-weekly frequency to Lagos is only a fraction of its former schedule of 11 weekly flights to Lagos and iveto Abuja, Nigeria.

Sighs of relief, but will that be enough to keep airlines from leaving?
The news of the CBN transaction follows reports detailing rising tensions as foreign airlines were positioning to exit Nigeria’s market over difficulties in repatriating their revenues from ticket sales.

In a letter addressed to Nigeria’s Minister of Aviation, Hadi Sirika, dated July 22, 2022, Emirates said it had “no choice” but to take action in reducing its operations to the West African country to mitigate the “continued” operational losses which the airline revealed amounted to $10 million every month.

The Gulf carrier was one of the first airlines to take acute action after announcing its decision to suspend all of its flights to and from Nigeria from September 1, 2022. A few weeks prior, the airline had announced plans to reduce flights to destinations in Nigeria from August 15, 2022 over the revenue repatriation issue.

However, the Gulf carrier noted that it would re-evaluate its decision if there was a positive development in Nigeria.