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British Airways may exit Nigerian routes

By on May 29, 2016

British Airways is evaluating its routes to Nigeria, adding to aviation industry pressure on the Federal Government as sister carrier, Iberia, and United States competitor, United Airlines, halt flights to the country as traffic stutters and currency controls delay access to revenue.

The United Kingdom carrier is struggling to repatriate its share of the $575m that Nigeria currently owes to airlines globally from tickets sold, according to the Country Manager for British Airways and Iberia in Nigeria, Mr. Kola Olayinka.

Spanish carrier, Iberia, had on May 12, 2016 halted flights to Lagos “due to very difficult operating circumstances and dwindling passenger numbers,” he said in an e-mailed response to questions.

The International Air Transport Association Chief Executive Officer, Mr. Tony Tyler, met with Vice President Yemi Osinbajo earlier in the week over the matter, Bloombergreported.

In a statement on Wednesday, IATA warned that Lagos could lose its status as a hub to West Africa. United Airlines informed employees on Wednesday that it would end flights from the US to Nigeria on June 30 because of a lack of demand and difficulty in collecting payments.

The Chief Executive Officer, IAG, the parent company for British Airways and Iberia, Mr. Willie Walsh, said last month that Iberia would stop serving Lagos after the low price of oil caused Nigeria’s economy to contract for the first time since 2004 in the first quarter.

Limits on dollar repatriation have been imposed by the Central Bank of Nigeria as reserves slip to $26.5bn, the lowest in more than a decade, from more than $30bn in early 2015.

“Exiting Nigeria is a very big decision” and “not taken lightly” following London-based British Airways’ 80 years of operations in the country, Olayinka said. “I believe very strongly that we will keep evaluating the situation, but I can assure you, BA is very committed to Nigeria.”

The government is assessing the situation, while the CBN Governor, Mr. Godwin Emefiele, has suggested a flexible exchange rate regime that would end the naira’s peg to the US dollar, Olayinka said.

The IAG is awaiting details of the policy “so that we can start the process of rebuilding,” he said.

 

[Punch]