British Airways Evaluates Its Nigeria Routes on Traffic, Dollar

TCR NEWS
27 May 2016



British Airways Evaluates Its Nigeria Routes on Traffic, Dollar



  • Sister brand Iberia stopped flying to Lagos on May 12

  • United Airlines plans to halt Nigeria service at end of June


British Airways is evaluating its routes to Nigeria, adding to aviation-industry pressure on the government as sister carrier Iberia and U.S. competitor United Airlines halt flights to the oil-based market as traffic stutters and currency controls delay access to revenue.


The U.K. carrier is struggling to repatriate its share of the $575 million that Nigeria currently owes to airlines globally from tickets sold in the West African nation, said Kola Olayinka, country manager for British Airways’ and Iberia’s parent company, IAG SA. Madrid-based Iberia halted flights on May 12 to Lagos, Nigeria’s biggest city, “due to very difficult operating circumstances and dwindling passenger numbers,” he said in an e-mailed response to questions.


International Air Transport Association Chief Executive Officer Tony Tyler met with Nigerian Vice President Yemi Osinbajo this week, the lobby group said in a statement Wednesday that warned that Lagos could lose its role as a hub to West Africa. United Airlines informed employees on Wednesday that it would end flights from the U.S. to Nigeria on June 30 because of a lack of demand and difficulty in collecting payments.


IAG Chief Executive Officer 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 Nigerian Central Bank as reserves slip to $26.5 billion, the lowest in more than a decade, from more than $30 billion 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 Central Bank governor Godwin Emefiele has suggested a flexible exchange rate regime that would end the naira’s peg to the U.S. dollar, Olayinka said. IAG is awaiting details of the policy “so that we can start the process of rebuilding,” he said.


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