Emirates Airlines is talking to the Zimbabwean government over earnings stuck in the country but has no plans to pull out of the route, a senior official at the airline says.
Orhan Abbas, senior vice-president of commercial operations in Africa for Emirates, names Zimbabwe as one of several African markets where currency troubles have hurt operations.
Emirates was facing challenges with repatriation of funds from Zimbabwe and Ethiopia, and had earlier faced similar problems in Nigeria, Angola, and Sudan. The airline is in talks with governments of both Zimbabwe and Ethiopia, about getting the money it is owed, according to Gulf News.
“We have funds stuck but we believe in those economies,” Abbas is quoted as saying, adding that Emirates did incur losses because of currency devaluations in different markets over the years. There’s no detail on how much Emirates is owed in total.
Emirates launched flights to Zimbabwe in 2012, and reportedly plans to add Victoria Falls to its routes. Emirates also flies cargo on the Zimbabwe route.
Airlines with operations in Zimbabwe had US$150 million trapped in the country as at the end of 2018, according to the Zimbabwe Tourism Authority. South African Airways, which has the highest number of flights into Zimbabwe, is owed the bulk of the unremitted funds.
Zimbabwe has been on a drive to attract larger airlines into the country. The expansion of the Victoria Falls airport has increased traffic into the resort town, while construction of a new terminal and rehabilitation of the main RG Mugabe International in Harare began last year.
However, debts to international airlines have weakened Zimbabwe’s campaign. With the International Air Travel Association (IATA) warning of dire consequences over unremitted funds, Zimbabwe promised monthly payments of US$4 million to clear the debt, a tall order given deepening foreign currency shortages.
In the year ending March 31, 2019, Emirates saw a 9% rise year-on-year in revenues from its operations to and from Africa, with the region registering the strongest growth compared to other markets. Currency fluctuations in Egypt and other African countries remain a key challenge, according to Abbas.
“Our greatest threat in the last couple of years has been the devaluation of currencies and repatriation of funds. This has been massive for us,” Abbas said. “We’ve lost a lot of money on those two areas. But still, the performance has been going on. We have seen challenges but it [Africa] does bounce back.”
Emirates currently flies to over 20 countries in Africa.
