United Airlines To Exit Nigeria By End Of June

Chicago-based American airline, United Airlines, said it was going to discontinue its daily Houston Lagos flight operations with effect from June 30.

This move is as a result of difficulties in expatriating its ticket revenue due to strict foreign exchange policies as well as the downturn in the energy sector.

United Airlines also announced that passengers who already booked for flights beyond those days will be contacted for refunds. However, passengers can still fly to Nigeria on United’s trans-Atlantic business partner, Deutsche Lufthansa AG, through a connection in Frankfurt.

This is happening barely six weeks after Spain’s national carrier, Iberia Plc, stopped flights to Nigeria, due to dwindling passenger traffic.

Over the past year, Nigeria, has been dealing with quite a number of economic challenges due to the fall in oil prices. This can be attributed to the fact that it was highly dependent on oil as its only source of revenue – 75 percent of the country’s revenue and about 90 percent of its foreign exchange was generated through oil exports.

In order to save the country from a total collapse the government put stringent monetary policies in place. However, these policies have yielded no result as it has only weakened the country’s currency and economy further.

The president has also been adamant about not devaluing the naira in order to boost investors confidence in the country again.

Several investors have pulled out of the country due to the government’s foreign exchange policies which make it difficult for them to access revenue in US dollars and continue with their businesses.

In 2016 alone, several businesses such as Woolworths, Clover and, most recently, Iberia Airline closed operations in Nigeria.

Investors are no longer confident in the country as they are unsure whether or not the next policy the Nigerian government puts in place will hurt them.

This news will also affect the country’s rank on the World Bank’s ease of doing their business report for 2016.

The International Air Transport Association (IATA) which represents over 260 airlines attending to 83 percent of the global air traffic, during the African Aviation Day programme held on Monday in Abuja, said that funds belonging to foreign airlines, which had been trapped in the country due to the Federal Government’s policy on foreign exchange, stood at $575m as of March this year.

However, it is worthy to note that Nigeria is not the only country where United Airlines have decided to end its operations. United Airlines is suspending daily flights from the Edmonton International Airport in Canada to Chicago and San Francisco with effect from July 1st due to the low Canadian dollar.

A spokesperson with United Airlines revealed that the airline does a constant review of how its flights are performing and that these particular flights were not performing as well as they expected.

In 2014 also, United Airlines and some other airlines pulled out of Venezuela due to similar reasons.

This development is really a cause for worry as  investors confidence has dropped significantly.

More situations like this could also lead to an increase in the rate of unemployment in Nigeria as staff of such companies will be laid-off.


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