The Federal Government of Nigeria and the United Arab Emirates (UAE) have reached a fresh agreement under which airlines from both countries are now authorised to sell air tickets and ancillary services in United States dollars and other freely convertible currencies.
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This development, contained in the updated Bilateral Air Services Agreement (BASA) between the two nations, has also paved the way for the official resumption of Emirates Airlines’ operations in Nigeria, ending a diplomatic standoff that began in 2022 over the airline’s inability to repatriate revenue due to forex constraints.
The agreement, sighted by The PUNCH, confers the liberty on designated carriers from both sides to transact in either local currency or any globally accepted currency. Designated UAE carriers under the deal include Emirates, Etihad Airways, Air Arabia, flydubai, Air Arabia Abu Dhabi, and Wizz Air Abu Dhabi. On the Nigerian side, Air Peace and United Nigeria Airlines have been designated.
A key clause of the agreement states:
“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 bilateral pact also allows airlines to operate commercial services directly or through appointed agents and to utilise their own transport documentation.
While the provision formalises a model already in practice among some foreign airlines in Nigeria, it marks a significant policy shift in the country’s aviation sector. For instance, preliminary checks confirm that U.S.-based Delta Airlines and United Airlines had previously secured similar approvals to transact in dollars under their bilateral arrangements.
However, Nigerian travel agencies have raised concerns about the practical implications of the shift. With Emirates, Delta, and United Airlines now permitted to receive payment in dollars, agents are reportedly under pressure to source and remit large volumes of foreign currency to the International Air Transport Association (IATA), amid existing banking restrictions.
Industry sources also cited the Central Bank of Nigeria’s (CBN) $10,000 limit on foreign currency cash withdrawals and transfers as a major challenge facing operators.
Despite the dollar approval, the agreement provides that all local operational expenses — including handling, catering, and ground services — incurred by foreign airlines must be settled in the host country’s local currency unless otherwise approved by domestic currency laws.
“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 further states.
Although Emirates and other UAE-designated airlines have reportedly resumed flight operations to Nigeria, their Nigerian counterparts — Air Peace and United Nigeria Airlines — are yet to commence reciprocal flights to the UAE. No official reason has been disclosed.
The agreement also permits future designation of additional carriers by the UAE.
“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,” the document added.
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