United, Iberia airlines pull out of Nigeria; funds blocked

LAGOS, Nigeria – U.S. airline United and Spain’s Iberia are pulling out of Nigeria as the government is urged to release more than $600 million in air ticket sales blocked by the West African nation’s chronic foreign currency shortage.

The International Air Transport Association’s regional manager flew to the capital, Abuja, this week to negotiate with the government after the organization representing airlines warned: “The inability of airlines to access forex in Africa’s largest economy, if not solved, will affect air transport services to, from and within Nigeria and undermine the country’s position as West Africa’s aviation hub.”

United Airlines spokesman Kevin Johnston confirmed Wednesday that the airline’s last flight from Lagos to Houston is June 30. Nigeria is United’s only destination in Africa.

Iberia left in May, citing “very difficult operating circumstances and dwindling passenger numbers.”

Most foreign airlines have stopped accepting Nigeria’s troubled naira currency after the government stopped their access to foreign exchange from the banks last year.

The crisis is blamed mainly on slumping oil prices and the government’s delay in devaluing the naira, officially set at 199 to the dollar but selling at currency exchanges at 350.

The cost of an economy ticket from Lagos to Houston this month on Delta Airlines, the other U.S. airline that services Nigeria, is $2,042. That’s 406,358 naira at the official rate but 708,400 buying dollars from a currency exchange.

Prices of imported and local goods have doubled and trebled, and the economy has contracted for the first time since 2004 as the government has barred access to foreign currency for non-essential goods.

Domestic airlines also have been hard-hit, and shortages of jet fuel have forced several to cancel or delay flights.

A proposed increase in jet fuel prices has the Airline Operators of Nigeria threatening to raise ticket prices.