The Federal Government of Nigeria and the United Arab Emirates have signed an updated Bilateral Air Services Agreement, allowing airfares between the two nations to be paid in U.S. dollars and other freely convertible currencies.

The agreement, confirmed by sources, marks a resolution to a prolonged diplomatic and commercial dispute that led to Emirates Airlines suspending its Nigerian operations in 2022, according to The Punch.

The revised BASA permits designated airlines from both countries to sell tickets and ancillary services in local currencies or any internationally accepted currency, enhancing flexibility for travelers and operators.

Nigeria’s designated carriers include Air Peace and United Nigeria Airlines, while the UAE’s roster features Emirates, Etihad Airways, Air Arabia, flydubai, Air Arabia Abu Dhabi, and Wizz Air Abu Dhabi.

This development clears the path for Emirates Airlines to resume flights to Nigeria, signaling a thaw in bilateral relations and a potential boost to trade and tourism between the two nations.

Industry analysts view the agreement as a strategic move to strengthen economic ties and improve connectivity in the region.

According to the document obtained, both parties confirmed that airlines are allowed to use their own transportation documents and conduct commercial activities independently 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.”

However, the provision partly aligns with existing arrangements for some international carriers operating in Nigeria.

Findings confirm that Delta Airlines and United Airlines have long been authorized under their respective bilateral agreements to conduct transactions with Nigerian customers in foreign currencies, a practice also endorsed by the Nigerian government.

The agreement aims to enhance international connectivity, but Nigerian travel agencies have opposed the airline’s demand to use dollars as legal tender for tickets.

With Emirates, Delta, and United now requiring dollar transactions, travel agents face challenges in securing large amounts of foreign currency for remittance to the International Air Transport Association.

Furthermore, the $10,000 cap on cash withdrawals and transfers creates additional operational hurdles for these agents.

The agreement also stipulates that foreign airlines must settle all local operational costs in the host country’s currency, unless otherwise allowed by local 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.