Nigeria pays part of airline dues amid flight blockage threats

The Central Bank of Nigeria released $265m to settle ticket sales owed to airline operators

Emirates said it will suspend all flights to Nigeria from September 1 over its failure to repatriate millions of its funds it said are blocked in the West African nation. AP

Nigeria released some funds owed to international air carriers to try and avert a crisis in the aviation sector amid warnings of flight suspensions from operators including Dubai’s Emirates airline.

The Central Bank of Nigeria released $265 million to settle ticket sales owed to airline operators, it said late on Friday.

Nigeria, Africa’s biggest economy, owes carriers $464m, the biggest amount held by any single African country, the International Air Transport Association said this month.

Overall, airlines are owed $1.6 billion from 20 countries as governments seek to retain hard currency, depriving the aviation industry of cash as it emerges from the coronavirus pandemic.

Of these blocked payments, 67 per cent are stuck in 12 countries in Africa, Iata said.

Other African states withholding funds from foreign airlines include Zimbabwe with $100m, Algeria with $96m, Eritrea with $79m and Ethiopia with $75m, Iata data indicates.

Iata previously said Nigeria’s failure to repatriate airline revenues will hurt connectivity.

Earlier this month, Dubai’s Emirates, the world's biggest long-haul airline, said it would suspend flights to Nigeria from September after difficulties in repatriating funds from Africa's most populous nation.

The airline has tried "every avenue" to address the continuing challenges to repatriate its revenue and made "considerable efforts" to start a dialogue with the relevant authorities to intervene to find a viable solution.

"Regrettably there has been no progress," an Emirates spokeswoman said in an emailed statement this month. "Therefore, Emirates has taken the difficult decision to suspend all flights to and from Nigeria, effective September 1, 2022, to limit further losses and impact on our operational costs that continue to accumulate in the market."

Lagos-based Punch Newspapers reported on Saturday that British Airways has stopped travel agents in Nigeria from selling its tickets.

Blocked remittances have plagued airlines for years, but the situation has been exacerbated by the Covid-19 pandemic that left airlines cash-strapped after two years of weak travel demand.

On August 4, Emirates said it would reduce its operations to Nigerian destinations Lagos and Abuja from August 24. The airline said at the time that if no progress was made in addressing the trapped funds issue, it would "have no choice but to take further measures".

"Should there be any positive developments in the coming days regarding Emirates’ blocked funds in Nigeria, we will of course re-evaluate our decision," the airline said. "We remain keen to serve Nigeria, and our operations provide much-needed connectivity for Nigerian travellers, providing access to trade and tourism opportunities to Dubai, and to our broader network of over 130 destinations.”

Nigeria, which earns about 90 per cent of its foreign exchange from oil, is struggling to produce due to pipeline theft and years of underinvestment.