Stakeholders bash Emirates over decision to suspend flight operations
Industry stakeholders have slammed Emirates Airlines over its decision to suspend its operations to Nigeria from September 1, 2022, saying that it is a subtle pressure on the government to release dollars that are obviously unavailable.
Industry observers said that the reason why the Central Bank of Nigeria (CBN) has been unable to pay the blocked fund was because the government does not have money; that blocked fund has been a challenge in Nigeria since 2015.
They also observed that while the airline singled out Nigeria, there are other countries that have been unable to allow airlines to have this fund, adding that there is a global economic meltdown, which is exacerbated by the Russia-Ukraine war.
These arguments are however coming at a time when the International Air Transport Association (IATA), expressed disappointment with the Nigerian government for the continual withholding of foreign airlines’ revenues, which has prompted Emirates to stop flying to Nigeria’.
An aviation analyst, argued no one owes the airlines anything in the truest sense because the country is going through so much and there is no dollar backing. “They either wait until we have the funds or quit operations as they have done. Enough of this arm-twisting.
“Their money is in their company’s account and the government has not and cannot tamper with it. So l don’t understand this argument about being owed. It’s affecting all of us. Many domestic airlines are facing the same predicament. They also have received CBN approvals for dollars but no cash.
“Would it be fair for them to go and announce that the government owes them? Instead of saying that the government has dishonoured a commitment to exchange their funds at a certain rate, they chose to announce that the government owed them. Is it good? The narrative these airlines are selling to the world is simply uncomplimentary and disturbing,” Young said.
The industry analyst also insisted that it is even foreign airlines that owe the federal government over N1 billion from royalties emanating from the Bilateral Air Service Agreement (BASA). He argued that in the principle of reciprocity, foreign airlines should pay premium on each passenger they take out of the country, if there is no corresponding Nigerian airline servicing the route.
Emirates does not pay Nigeria royalties from its operations from Nigeria since 2014. If you calculate it, it is more than the money Emirates says government owes it. so the demand of IATA and Emirates is inimical to the interest of Nigeria. I don’t understand why we are tolerating this. Emirates should stop coming to Nigeria if it chooses to. We have four to five million international passengers annually. That is where their interests are. Federal government should set up a committee to review the BASA we have with these countries. It is high time we started supporting our own,” Young said.
One of the stakeholders, who also remarked that at the time the airline increased its frequency, there was no passenger traffic to justify it.
“Please do not succumb to the blackmail of Emirates and their sponsors from within. The country cannot and will not manufacture dollars for them to repatriate over $80 million in Nigeria. When they were competing to outdo an indigenous, the only airline doing direct flight to Dubai, didn’t they know of the dollar situation here before embarking on having multiple frequencies into Nigeria? They do two flights out of Lagos daily and one out of Abuja daily, bringing the total to three daily flights into Nigeria and 21 flights every week,” the stakeholder said.
“Once they heard a Nigerian airline was about to start flying to Dubai, they applied to increase the Lagos frequency to three flights daily, just to stifle the airline out and dominate the route. They didn’t need all these flights but they increased frequency to stifle competition. Nigerians are even angry at the figures they are publishing; they feel having been ripped off by Emirates,” the stakeholder said.
An operator who expressed his fear about the impact of what he referred to as subtle blackmail of the government said, “The pressure is on and sooner rather than later the government will succumb and release millions in forex that is supposedly scarce to foreign operators that create and sustain jobs in their respective countries. $600m! Why not? who does not want to travel abroad? This is a huge subsidy to them in addition to the obscene fares they charge Nigerians which obviously have discounted the Naira at 800/$! Check it.
“Yet domestic operators cannot get forex to buy spares and pay for their leases or buy aircraft. Yes, how much do we really need? Nothing compared to the direct subsidies given to foreign airlines. Government should support Nigerian aviation investors, who create and sustain millions of jobs here. Airline Operators of Nigeria (AON) should also mount pressure to ensure that these monies are not paid to foreign airlines, while order priorities suffer,” he said.
Some of the stakeholders canvassed that what the government should do is to approve that airlines should sell their tickets in foreign currency.
“Time for a step back and reassessment. How come the airlines can’t repatriate their sales? Is it that they desire Dangote dollars as opposed to market dollars? This begs the statement of the CBN. We are not the source of delays in repatriation. Everyone on international flights carry dollars, Euros, Yuan, Rand, Dirham. So, why aren’t the airlines converting their naira sales to transfer? Waiting for the banks? Daily the banks are trading market dollars. Here is a case of, how are domestic airlines getting the foreign exchange. This is now a case of don’t cry for me Argentina.
“The real story therefore affects all sectors of the economy. Foreign airlines are asking for special treatment. We can’t therefore be blamed if domestic airlines are better at the price mechanics that make them more successful on the routes suspended by foreign carriers. For me, I’m going to stop saying funds are trapped, they aren’t. Air Peace should step into the gap voluntarily exited by Emirates, our media must also counter the foreign narrative that funds are trapped,” he said.
