The Federal Government and the Government of the United Arab Emirates (UAE) have agreed to recognise the United States dollar and other freely convertible currencies as legal tender for airfares between Nigeria and the UAE.
This development was revealed in the updated Bilateral Air Services Agreement between both nations, according to The PUNCH. This agreement paved the way for Emirates Airlines’ official return to Nigeria, ending a prolonged diplomatic and commercial stalemate that saw the airline suspend operations in Nigeria in 2022.
The agreement explicitly grants designated airlines from both countries the right to sell tickets and ancillary services in either local currencies or any other internationally accepted currency
UAE’s designated airlines include Emirates, Etihad Airways, Air Arabia, flydubai, Air Arabia Abu Dhabi, and Wizz Air Abu Dhabi. Nigeria’s designated airlines are Air Peace and United Nigeria Airlines.
According to the document obtained by The PUNCH, both parties also affirmed that airlines can use their own transportation documents and freely engage in commercial operations either directly or through agents.
The document reads partly, ‘The designated airlines of each contracting party shall have the right to sell, and any person shall be free to purchase, such transportation and its ancillary products and facilities in local currency or in any other freely convertible currency’.
The provision partly aligns with existing arrangements for some international carriers operating in Nigeria.
Preliminary investigations by The PUNCH confirm that both Delta Airlines and United Airlines have long been authorised under their respective bilateral agreements to transact with Nigerian customers in foreign currencies, a development the Nigerian government also endorsed.
While this agreement is expected to boost international connectivity, Nigerian travel agencies have rejected the airline’s request for dollars as legal tender for tickets.
With Emirates, Delta, and United now all transacting in dollars, travel agents are grappling with accumulating large volumes of foreign currency, which must be remitted to the International Air Transport Association.
Again, the $10,000 limit on cash withdrawals and transfers posed further operational constraints in the business of the practitioners.
Additionally, the agreement also mandates that all local operational expenses incurred by foreign airlines should be settled in the local currency of the host country unless otherwise permitted by domestic financial regulations.
‘The designated airlines of one contracting party shall have the right to pay for local expenses in local currency or, provided that this is in accordance with local currency regulations, in any freely convertible currencies’, the agreement added.
Meanwhile, The PUNCH has learned that while UAE-designated airlines have initiated operations into Nigeria, Air Peace and United Nigeria Airlines have yet to commence flights to the Gulf nation for unspecified reasons.
The bilateral reaffirmation also leaves room for future airline designations by the UAE, with Nigeria pledging continued cooperation.
‘Additional UAE airline(s) may be designated in due course by the aeronautical authority of the UAE. The delegation of Nigeria re-confirmed their designation of United Nigeria Airlines and Air Peace as the designated airlines of the Federal Republic of Nigeria’.
