Lufthansa Monitors Nigeria as Country Owes $600 Million in Fares

  • Airline won’t make ‘erratic decisions’ about Nigeria presence
  • Lufthansa plans to triple capacity on route to Nairobi, Kenya

Deutsche Lufthansa AG is closely monitoring its flights to Nigeria as the aviation industry awaits payment of about $600 million in outstanding air fares in the country, which is struggling to cope with depleted U.S. currency reserves.

The German carrier has made “minor adjustments” to winter flights to Africa’s biggest economy, Claus Becker, managing director for sub-Saharan Africa, said in an interview on Monday. The International Air Transport Association is in talks with the Nigerian government about the non-payment of fares and may reach a solution in the next few weeks, he said.

“We always take a very thorough and cautious approach -- there will be no erratic decisions on our side,” Becker said in Nairobi, the Kenyan capital. “The size and magnitude of Nigeria as a market is so immense.”

Lufthansa’s commitment to Nigeria comes after U.S. carrier United Airlines halted flights to the country and Iberia of Spain stopped a route to Lagos, the commercial capital. Nigeria owes airlines outstanding air fares as the oil-price slump depletes reserves of the U.S. currency and prompts the government to limit the amount of money that can be moved abroad. The figure owed to carriers was $575 million on March 31, IATA said last month.

IATA is trying to avoid a repeat of the aviation industry’s struggles in Venezuela, which owes 24 carriers $3.6 billion.

In Kenya, Lufthansa will triple passenger capacity on routes to Nairobi to tap increasing demand from a tourism-industry revival, Becker said. The German airline will begin operating the Airbus Group SE’s A340-300 wide body aircraft into the city starting in September, tripling its carrying capacity to 298 passengers from 89 currently.

The carrier had planned to operate an A340 on the route after cutting operating costs to destinations where yields are weaker, partly by ripping out first-class berths and installing a smaller business class.

Lufthansa reported a load factor of 94 percent on the Nairobi-Frankfurt route between January and April this year, Becker said, referring to the industry term for percentage of seats filled.

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