The company says it will stop flying to Nigeria next month, ending the its only route to Africa because of weakness in the energy sector and difficulty in collecting money from tickets sold in that country.
According to Bloomberg, Jonathan Guerin, United spokesperson said: “Repatriation has been a significant issue, as has been the downturn in the energy sector”.
“The daily route from Houston to Lagos had underachieved for years but was kept alive because of its importance to Texas-based customers,” United Continental Holdings Inc. said in a note to employees.
The last flight will be June 30, after which Delta Air Lines Inc. will be the only major US carrier flying to Africa.
Nigeria restricted the amount of money that can be moved abroad after the global slump in oil prices depleted the government’s dollar reserves.
The country owed airlines about $575 million in air fares as of March 31, according to the International Air Transport Association.
Passengers can still fly to Nigeria on United’s trans-Atlantic business partner, Deutsche Lufthansa AG, through a connection in Frankfurt.
The Boeing Co. 787 serving Lagos will be used on the San Francisco-to-Tel Aviv route, which will expand to daily in October from three times weekly, according to the airline note.
The Nigerian foreign exchange regime has made it difficult for airlines to make the kind of profits of the past, following the ease of fund repatriations.
Most airlines sell their tickets in naira at the rate of N197 to a dollar.
This makes them lose a sizeable amount of money to the exchange rate regime. Click to signup for FREE news updates, latest information and hottest gists everyday
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