Bloomberg: Emirates may quit African cities over dollar debts from low oil

Emirates

Persian Gulf airline Emirates said it could scrap flights to African locations as economies there falter following the oil-price collapse and governments withhold ticket revenues to shore up foreign currency reserves.

The biggest carrier on international routes may “cut frequencies and possibly even cities” amid the currency crunch and commercial difficulties in some markets, President Tim Clark said Tuesday in Dubai, where Emirates is based.

“Certain African countries have seen their currency really go down, it’s not a very good idea to continue there,” Clark said in a briefing at an International Air Transport Association event. “We are reflecting on a number of those.”

Emirates CEO Tim Clark
Emirates CEO Tim Clark

Nigeria alone owed Emirates $680 million as of early September, Clark has said previously, with carriers including United Airlines and Spain’s Iberia having already halted flights. The repatriation of dollars from Africa’s most populous nation has been limited since the drop in crude prices eroded the value of oil exports and reduced foreign-currency reserves to the lowest in more than a decade. The devaluation of the naira in June has yet to ease the situation.

IATA has said that the dollar reserves of Sudan, Egypt and Angola are also of concern to its members. Emirates serves all three countries, as well as Lagos and Abuja in Nigeria, though Clark didn’t specify which markets were most at risk of having flights pulled.

U.S. carriers have separately asked that the federal government grant them permission to collectively discuss ways of retrieving $3.8 billion held back in Venezuela, which has virtually halted the repatriation of past ticket sales in response to the oil-price pinch.

Source: Bloomberg