NIGERIA'S aviation industry has suffered a further major setback with Dubai's Emirates Airlines and Kenya Airways both announcing the suspension of flights to the Nnamdi Azikiwe International Airport in Abuja in response to foreign exchange scarcity.
Over the last year, Nigeria has suffered from a dearth of foreign exchange due to the collapse in global oil prices, hitting airlines hard. Due to a combination of aviation fuel scarcity, limited foreign exchange, a collapse in passenger numbers and high maintenance costs as they bring their facilities up to international standards, most Nigerian airlines have been unable to function as normal.
This has led several of them to ground their fleets, with the likes of Arik Air, Aero Contractors and First Nation all suspending operations at one time or the other over recent months, citing difficulties in procuring foreign exchange. Emirates, one of the biggest foreign airlines operating in Nigeria, said it would stop flights with effect from October 22, while the East African carrier, Kenya Airways, has also announced that it would suspend flights to and from Abuja with effect from November 15, 2016 as part of its restructuring and loss-saving measures.
Already, Emirates has written to the minister of state for aviation, Senator Hadi Sirika, over its intention to stop flights to and from Abuja. In its letter, Emirates was reported to have said that if after weeks off the Abuja suspension, no drastic change happens, it would also suspend Lagos operations indefinitely and with that exit the Nigerian market.
Emirates like many major international carriers operating in Nigeria, has huge sums received for ticket sales with the banks, which it has not been able to repatriate. About two months ago, foreign airlines’ funds trapped in the Central Bank of Nigeria (CBN) was put at $900m and to assist them, the federal government granted the carriers access to foreign exchange at a concessionary exchange rates to enable them repatriate about 50% of their ticket sales.
Besides the huge funds trapped in Nigeria, the recession has led to a reduction in passenger traffic, forcing the foreign airlines to reassess the logistics of operating. Emirates Airline has also threatened to stop its flights into Africa if the economic downturn on the continent worsens.
Speaking yesterday at an International Air Transport Association (IATA) forum in Dubai,
Emirates president Tim Clark, said foreign airlines flying to Africa now refuel abroad because jet fuel supplies had become more expensive and scarce. He added that Emirates’ load factor – a measure of capacity utitlisation – for the rest of 2016 and 2017, would probably be in the mid-70s to low-80s in percentage terms.
Mr Clark added: “In certain African countries, the currencies have really gone down, so we’re reflecting on a number of these to look at where it’s just not worth for us to travel.”
About a month ago, Emirates started tanking fuel from Accra, Ghana because of the scarcity of jet fuel in Nigeria. Other foreign carriers were also forced to refuel at different locations outside the country before flying to Nigeria.
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