The Federal Government of Nigeria and the United Arab Emirates (UAE) have amended their Bilateral Air Services Agreement (BASA) to permit airlines from both countries to sell tickets and ancillary services in either local currencies or any freely convertible foreign currency, such as the U.S. dollar.
This development follows the resumption of Emirates Airlines’ operations in Nigeria, ending a diplomatic and commercial impasse that began in 2022 when the airline suspended flights due to challenges in repatriating funds.
Under the revised agreement, designated carriers from both nations—including Emirates, Etihad Airways, Air Arabia, flydubai, Air Arabia Abu Dhabi, Wizz Air Abu Dhabi, Air Peace, and United Nigeria Airlines—are authorized to transact in local or internationally accepted currencies.
While this move aims to enhance international air connectivity and provide flexibility for airlines, it has elicited concerns from Nigerian travel agencies. They argue that the dollarization of ticket sales exacerbates foreign exchange challenges, especially given the Central Bank of Nigeria’s $10,000 daily transfer limit. This constraint hampers their ability to remit funds to the International Air Transport Association (IATA) and manage operations effectively.
The agreement also stipulates that foreign carriers must settle operational costs incurred within Nigeria using the local currency, unless exempted under domestic financial regulations.
While UAE-designated airlines have resumed flights to Nigeria under the new terms, Nigerian carriers like Air Peace and United Nigeria Airlines have yet to commence operations to the UAE, with reasons for the delay remaining undisclosed.
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