Major international airlines are deserting Nigeria citing the free-falling local currency and an economic crisis that has seen government introducing tighter foreign currency exchange controls.
United Airlines, the third largest United States based carrier by revenue, has become the latest airline to pull out of the West African economic giant with its flights ceasing by June 30.
The airliner cited reduced revenue, which has been blamed on the deteriorating value of the naira and tight currency controls by the government as some of the reasons for the decision to stop flying to Nigeria.
United Airlines followed on the footsteps of British Airways, Spanish national airline Iberia, Air France-KLM, Qatar Air, and Etihad, who were also unsettled by the Nigerian government's given restrictions on the repatriation of revenues on tickets sold in naira.
Nigeria has struggled with dwindling foreign reserves due to the downturn in the energy sector as oil prices dropped globally.
The government, in a bid to manage foreign exchange outflows, placed restrictions after it limited money transfers out of Nigeria. The policy has hit international carriers hard as their funds have been trapped funds at the Central Bank of Nigeria (CBN).
According to the International Air Transport Association (IATA), international are owed about $575 million by the central bank.
Sources have also revealed that the international airlines have been going through a hard time as they were not able to record a "high load factor".
This was brought about by the economic problems bedevilling the West African country, which has depleted the finances of those who otherwise would travel out of the country on business or holiday.
Airlines recently adjusted their fares and stripped off all promotional tickets, making it more expensive for ordinary travellers to fly.
United Airlines' daily route from Houston to Lagos had been experiencing some downturn for years but stayed relevant because of its importance to Texas based customers, United Continental Holdings Inc, reports say.
Passengers can still fly to Nigeria on United Trans-Atlantic business partner, Deutsche Lufthansa AG, through a connecting flight to Frankfurt.
The Boeing CO. 787 serving Lagos will now be plying the San Francisco/Tel Aviv route, which has expanded to daily flights from three times weekly flights.
Industry experts say more airlines might also consider pulling out of Nigeria due to the worsening economic problems.
IATA on Monday said it had been engaged in talks with the government on how to repatriate airlines' funds trapped in CBN and said it was confident a solution would be found soon.
Source
-The Africa Report
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