Africa’s economic woes weigh heavily on Emirates airlines - African Business Magazine
Africa’s economic woes weigh heavily on Emirates airlines

Africa’s economic woes weigh heavily on Emirates airlines

Emirates airlines could withdraw some flights to Africa due to the challenging economic environment on the continent. The Dubai-headquartered company warned that many African economies were struggling due to the oil-price collapse, and some governments were withholding ticket revenues to boost foreign currency reserves.

“In certain African countries, the currencies have really gone down, so we’re reflecting on a number of these to look at where it’s just not worth us travelling,” Emirates President Tim Clark told Reuters on Tuesday 18 October. He did not name the routes that could be affected.

However, Nigeria owed international airlines over $680m, according to the International Air Transport Association (IATA), and Emirates has already reduced its twice-a-day services to Lagos and the capital Abuja to just one flight to each destination. United Airlines and Spain’s Iberia, meanwhile, have already halted flights to Nigeria altogether.

The move by the international airlines comes after the West African country restricted the amount of money that can be moved abroad after the global slump in oil prices, which depleted the country’s U.S. currency reserves. The price of brent crude oil has fallen from over $100 per barrel in June 2014 to around $52 per barrel on 18 October.

Meanwhile, the IATA reported in August that Sudan, Egypt and Angola owed $410m, $250m and $279m, respectively, to international airlines. Emirates currently has flights going to all three nations.

“Blocked funds are a problem in a diverse group of countries, some of them undergoing significant economic challenges particularly with a fall-off in oil revenues,” said Tony Tyler, IATA’s CEO. “But one thing all [four] nations have in common is the urgent need for robust air connectivity that is being hampered by airlines’ difficulty in repatriating funds.”

Growing market

Despite the reduction in international airlines operating in Africa, air passenger numbers in the continent are predicted to increase by 5.1% to 303m passengers over the next 19 years, according to the IATA. The top ten fastest-growing markets in Africa will be Sierra Leone, Guinea, Central African Republic, Benin, Mali, Rwanda, Togo, Uganda, Zambia and Madagascar. Globally, air passenger numbers will double from 3.8bn people in 2016 to 7.2bn people in 2035, IATA reported.

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