Travel News

Bloomberg) -- Sign up for our Middle East newsletter and follow us @middleeast for news on the region.

Etihad Airways posted a record first-half profit as long-haul travel revived with the easing of coronavirus curbs and the Gulf carrier added flights to European resorts to tap pent-up demand for vacations.

The Abu Dhabi-based company had a core operating profit of $296 million in the first six months, compared with a loss of $392 million a year earlier, even after fuel costs increased by almost 60%, it said in a statement Thursday.

Passenger loads increased consistently over the period, rising by almost 22 percentage points, as bookings recovered and Abu Dhabi further relaxed pandemic-related restrictions from February.

Etihad coped better with the Covid pandemic than many other airlines after a major downsizing from 2017 slashed costs and repositioned it as a mid-size carrier. The company had racked up billions of dollars in losses under a previous strategy of focusing overwhelmingly on inter-continental markets.

Chief Executive Officer Tony Douglas said in the release that traffic had come “roaring back” in 2022, and “thanks to our transformation program, Etihad is emerging from the pandemic stronger.”

Passenger sales tripled in the first six months, aided by seasonal flights to locations such as Nice in France and holiday islands in Greece popular with Emiratis seeking to escape Abu Dhabi’s summer heat. Cargo revenue gained 6% even as volumes carried dipped by almost a fifth with belly-hold space increasingly filled with customer bags.

Etihad didn’t provide a full-year outlook, though Douglas said in April it was possible the carrier would show positive earnings for all of 2022, one year ahead of schedule, after turning profitable in the first quarter.

The carrier has ditched less-efficient planes including Airbus SE A340s and A330s and Boeing Co. 777s, while its A380 superjumbos are in storage. That leaves the fleet focused on Boeing 787 Dreamliners and Airbus A350s.

AIR travelers have begun groaning bitterly under the prohibitive fares airline operators have rolled out for flights within Nigeria as a one-hour flight now costs over a hundred thousand (N100, 000) naira.

When The PUNCH visited the domestic wings of the Lagos airport on Tuesday, many of the travelers lamented the sharp increase in airfares.

Investigation by our correspondent revealed that economy class domestic tickets from Lagos to Abuja via Arik Air, United Nigeria and Air Peace as of the time of filing this report cost over N150,000, other airlines have since followed suit.

An angry traveler who gave his name only as Ubong and claimed to have been a frequent traveler said, “This is not the time to ask for my name, the federal government and all those concerned should do the needful, why does the average Nigerian have to suffer. I mean, we are a fuel producing nation, why are we suffering?

“Everybody is just doing as they like, how can you say Lagos to Abuja is N154,000, am I plucking money from the tree? The roads are not safe, so travel by road and get kidnapped. Those that were kidnapped on the train how many months ago are still in captivity. Which account will I write this expense?”

Another traveler who said she had to make the trip as she was going on business said, “The Nigerian travelling populace is made up of mostly business people, should we now spend all our earnings on air transport? I can’t even begin to explain how this makes me feel,” Miss Nike concluded.

It was learnt that the increase in price of aviation fuel (Jet A1) and its scarcity is a contributory factor to the hike in fares.

A litre of Jet A1 that was selling for N400 now sells for over N800 per litre. The airlines have also complained about difficulties in getting forex.

Despite a significant increase in domestic air passenger traffic in 2019 by almost 30 percent, there is still a huge gap in ravel demand by Nigerians. According to the figures released by the Consumer Protection Directorate of the Nigerian Civil Aviation Authority, roughly 15 million air travelers both domestic and international went through the airports in 2018.

The umbrella body for domestic airlines in the country, Airline Operators of Nigeria, had a few days ago notified passengers of air transport services that the sector has been hit by a major crisis of acute scarcity of Jet A1, thereby warning them of possible flight cancellations and hike in airfares.

An obviously stressed air passenger who gave her name as Jessica Joseph said, “This just means things are getting out of hand, because how do you explain this? Who do we hold responsible now? Our leaders, the cause of all this have money to fly around as they like, their jets are fully powered on taxpayers’ money yet it is the tax payer that is suffering, imagine, what if I now want to fly out of Nigeria, na to rob bank o, abi?”

The last person The PUNCH spoke to was a man who had his luggage strapped to his shoulders, sweating and cursing no one in particular. On approaching him, he insisted on speaking only on condition of anonymity. He said, “I came here today hoping I could fly my family of four from Abuja to Lagos for the Summer holidays but here I am, confused, I’m not even sure I want to go to Abuja again. I’m just grateful I had not rushed to tell my children my plan else I don’t know what I would have done. Something has to be done to salvage this situation, urgently too.”

The Minister of Works and Housing, Babatunde Fashola, on Thursday declared that the collection of two to three years’ rent in advance by property owners was causing more harm than good to Nigeria’s economy.

Fashola, who intensified the push for monthly rent payments across the country, charged state governments to look at ways to make the payment of rent easier and more comfortable for both tenants and landlords.

The minister disclosed this during his address at the 2022 National Council Meeting on Lands, Housing and Urban Development, the 11th in the series, which held in Sokoto State.

In his speech at the event, which was made available to our correspondent in Abuja, Fashola said, “I concede that majority of the houses belong to the private sector and they expect legitimate income from rent for the properties.

00:00/08:08

“However, I hold a strong view that asking for two to three years rent in advance from working class people (as distinct from corporate tenants who may prefer to pay in advance) does more harm than good to all concerned and to the economy.

“Interestingly, rent is a matter over which the Federal Government has no constitutional authority because it is a local matter and rightly so.

“But I use the platform of this meeting to challenge and provoke all state representatives to thoughts and action about how we can make the payment of rent easier and comfortable for both tenants and landlords.”

This, according to the former Lagos State Governor, would be a most revolutionary intervention when working class people could pay their rent when they received their salaries.

“This is possible if we try and this will give the fullest possible expression to the theme of this meeting which is, ‘Housing our people, by all of government and all our people’,” he stated.

Fashola told delegates at the meeting that at the Federal Government level, “we have introduced Rent-to-Own into our acquisition/sale model for the disposal of the houses in the National Housing Programme.”

All schools have been told to shut and send children home amid security fears in Nigeria's capital, Abuja, and in nearby Nasarawa state.

Intelligence reports suggest armed groups are planning attacks in several states, including on the capital.

Schools, mainly in northern Nigeria, have become a target of kidnapping gangs in recent years - with hundreds of students held for ransom.

President Muhammadu Buhari is currently meeting with security chiefs.

Most private schools were in the middle of exams when they had to close on Wednesday afternoon.

An official at the association of private school owners in Abuja told the BBC that the directive to shut down had come from local authorities in the capital.

Those schools with adequate security arrangements would be allowed to hold a one-day prize giving ceremony at the end of next week, he said.

But the news has caused concern for parents in a city populated by many civil servants, who often send their children to private schools.

While some schools in Abuja had already closed for the term, the majority were not scheduled to close until next week.

He added that those with adequate security arrangements have been allowed to hold a one-day prize giving day many had been preparing for.

Abuja residents have been feeling uneasy since armed men broke into a prison in the city and released hundreds of criminals a few weeks ago.

On Sunday, at least three soldiers from an elite unit of presidential guards were killed in the Bwari district of the city.

They had been responding to threats of an imminent attack on the Nigerian Law School located in the area. Nearby Veritas University has since shut down and sent students home.

The next day, the government shut down one of its secondary schools in the Kwali suburb of Abuja after a security incident close by.

This level of insecurity in the city is unprecedented since President Buhari took office in 2015.

Security agencies have recently beefed up their security presence at strategic locations within the city centre.

But this seems to be doing little to allay fears, even amongst politicians.

This week, an MP told colleagues who were away from the city not to return for their own safety, highlighting the failures of Mr Buhari's government in dealing with widespread insecurity across the country.

On Wednesday, opposition senators gave the president a six-week ultimatum to find a solution to the security crisis or face impeachment, though they lack the numbers to do so.

Last year, there were attacks and mass abductions in at least 10 schools in Zamfara, Kaduna, Kebbi and Niger states.

(Bloomberg) -- Affordable housing is becoming more and more precarious as rents keep climbing at a record pace, and wages for many Americans aren’t keeping up with inflation. 

The average worker on a 40-hour week would need to earn $21.25 an hour to afford a one-bedroom home in the US, and $25.82 to afford a two-bedroom home, according to a new report from the National Low Income Housing Coalition, an advocacy group. In every state in the US, the cost to rent a home exceeds their minimum wage.

In Arkansas, for instance, workers would need to earn $14.89 an hour to afford a two-bedroom home, but the state doesn’t have a minimum-wage law, so its workers make the federal minimum wage of $7.25.

Even while California and other states across the country have raised minimum wages, “The cost of housing continues to far outpace income growth,” said Representative Maxine Waters, a Democrat from California and the Chairwoman of the US House Committee on Financial Services. “It is unconscionable for this country, with the resources that it has, to ignore the housing crisis in America.” 

Waters noted that California’s $15 minimum wage is only half of what a person would need to afford a one-bedroom apartment. Workers would need to earn $39.01 an hour for a two-bedroom. Seven of the 10 metropolitan areas with the most expensive housing wage for a two-bedroom apartment are in California.  

Eighty-six percent of extremely low-income renters are cost-burdened, and 72% of extremely low-income renters are severely cost-burdened, the report also said. Households are considered housing cost-burdened if they spend more than 30% of their income on rent and utilities.

While rent remains financially out of reach for many Americans, it is still more affordable to rent than buy a home.

The latest attack on the military checkpoint comes a few days after terrorists launched a similar attack on presidential guards in Abuja.

By Nasir Ayitogo

Gunmen are currently engaging troops of the Nigerian Army in a shootout in Madalla, Niger State, Punch Newspaper reports.

According to the report, the terrorists stormed the Zuma Rock checkpoint, close to Zuma barracks and began to shoot sporadically.

The checkpoint is located along the Abuja-Kaduna expressway that has witnessed attacks by gunmen.

Eyewitnesses have said there is a serious gridlock in the area as motorists were forced to abandon their vehicles and run for safety.

Spokespersons for the army and police were not available for comments as they did not respond to telephone calls and text messages.

The latest attack on the military checkpoint comes a few days after terrorists launched a similar attack on presidential guards in Abuja.

PREMIUM TIMES reported how troops of the guards’ brigade, responsible for the security of the Nigerian president, were ambushed.

Two officers (a lieutenant and a captain) and six soldiers were killed in the attack while at least four others, including the commanding officer who is said to be a lieutenant colonel, were injured and taken to the hospital.

While the military and the Nigerian government kept mum on the attack, the Kogi State Government on Tuesday announced that the two officers killed were from the state.

On Thursday, the federal government finally confirmed the attack with the National Security Adviser, Babagana Monguno, saying the soldiers “were ambushed and decimated” by the terrorists.

By Babajide Komolafe, Economy Editor

The burden of under-recovery for fuel subsidy cost borne by the Nigeria National Petroleum Corporation, NNPC, Limited, and hence its inability to remit into the federation account, is a major factor worsening the prevailing acute scarcity of the dollar driving the continued depreciation of the naira.

Other factors include increased forex demand for summer travels, exodus of Nigerian students, and activities of politicians buying up dollars in preparation for 2023 general elections, as well as dollar outflow via foreign capital reversals.   

The dollar outflow via foreign capital reversals from emerging and developing economies is triggered by interest rate hike by central banks of developed countries in their bid to contain rising inflation. 

Furthermore there is rising demand for dollars  by Nigerians traveling for summer holidays while the ongoing imbroglio in the educational sector has also triggered exodus of Nigerian students to foreign schools, resulting in additional demand for dollars.

Prior to its transformation to NNPC Limited, the NNPC has the statutory function of remitting oil revenue in dollars into the federation account. This remittance which forms a major part of the nation’s dollar earnings and hence critical source of dollar supply has not been forthcoming due to fuel subsidy payment.

The spike in fuel subsidy aggravated by the Russia/Ukraine war has wiped out the expected contribution of NNPC into the federation account. 

The above according to Vanguard investigations accounted for the decline in the nation’s external reserve for most part of the first half of the year,  in spite of the sharp rise in the price of crude oil. 

Though the price of Nigeria’s Bonny Light crude rose by 66.5 per cent per cent to $126.94 from $76.25 on December 31st, 2021, the external reserves declined steadily to $38.421 billion on June 6th, 2022 from $40.52 billion at the end of December 2021, translating to N2.1 billion or 5.1 per cent. 

This downward trend in reserves, according to investigations, was further worsened by a huge dollar facility the apex bank had to extend  to the NNPC recently to fund its forex obligations. 

Recall that the Senate on Wednesday, resolved to summon the Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, to educate and inform senators in a closed session on the reasons for the rapid depreciation of the value of the naira. This follows the continuous depreciation of the naira which worsened to N710 per dollar on Wednesday July 27th from N615 per dollar on June 30th. 

But a senior banking industry  source,  who spoke to Vanguard on condition of anonymity said: “There are four sources through which Nigeria earns foreign exchange namely proceeds from oil exports, proceeds from non-oil exports, diaspora remittances, and  foreign Direct/Portfolio Investments (capital flows).

“The past six years have been characterized by two recessions, triggered by a slowdown in the global economy as well as the effects of COVID-19. These were also further accentuated by sharp declines in the prices of crude oil, the major source of Nigeria’s foreign exchange.  

“Considering Nigeria’s heavy dependence on oil exports for foreign exchange earnings and government revenue, the impact of the oil market crash severely affected the government’s naira revenue and other macroeconomic aggregates including economic growth. Hence, the rate of exchange between the naira and other currencies has widened over the past few years.”

Dismissing claims that the persistent depreciation of the naira is due to impact of cryptocurrencies, the source averred that “the current exchange rate of the Naira, like other major currencies, is not driven by cryptocurrencies, given the volatility in the cryptocurrency space, which lost over two  trillion in the past two years in face of high inflation.

Explaining factors driving the persistent naira depreciation, the sources stressed that  it is important for people to  understand that the  CBN issues legal tender in Nigeria (Naira) and does not print foreign exchange, and the pressure on the Naira has both local and global perspectives”.

“There is unabating demand for foreign exchange for both goods and services, thereby creating a demand challenge. 

“Domestically, there has been zero dollar remittance to the country’s Foreign Reserve by the Nigerian National Petroleum Corporation, NNPC.

“High inflation in other climes and the hike in interest rates has heightened pressures on Nigeria’s exchange rate. This has triggered capital flow reversals from Emerging Markets and Developing Economies (EMDEs) to more advanced economies

In Nigeria, which is also an OPEC member state, the Federal Government has maintained a controlled price of N175 per litre through the payment of fuel subsidy.

The retention of the pump price of N165 per litre which is far below the landing cost of petrol is all in a bid to cushion the negative impact of global energy crisis on the cost of living on Nigerians.

* Says financial health of some airlines not sustainable

BY   Emmanuel Addeh in Abuja

The Nigerian Civil Aviation Authority (NCAA), yesterday said with rising dollar scarcity, weakening value of the naira against the dollar as well as the rocketing price of jet-A1, the industry is currently experiencing a full blown crisis.

Describing the problem as ‘horrible’, the Director General of the NCAA, Capt. Musa Nuhu, who spoke on the state-run television station, NTA, noted that the triple challenges have combined to throw the sector into some form of instability. Aviation fuel is currently selling at about N1000, while the cost of operations in the sector has generally climbed in recent months, resulting in a massive rise in the cost of flight tickets.

“We indeed have a crisis. And now first of all, it’s about the scarcity and unavailability of jet -A1 which is a significant component of the direct operating costs of any airline. “The increase in price is about five times over what it was less than a year ago. And to compound matters, not only the scarcity of foreign exchange, but the exchange rate itself has deteriorated significantly, doubling the cost of the airlines operations in terms of maintenance, training of pilots, buying spare parts and the purchase of fuel,” he stated.

Nuhu added that due to the crisis in Ukraine and Russia, the international price of jet A1 has increased significantly and at the same time , the value of the naira has decreased significantly , while the dollar has been getting stronger, creating multiple jeopardies. According to him, with the current situation, the NCAA has begun an audit of some of the airlines, noting that the health of the airlines was not sustainable if things continue as they are.

“Indeed, we do have a serious crisis. We’ve started the financial and economic health audit of some couple of airlines and what I can say is that it’s not sustainable. “A significant amount of money is wiped out just getting jet-A1 to fuel the airlines. Unfortunately, flight delays cancellations come when an airline goes or takes hours to negotiate (for fuel). And some of the airlines because of previous debt, they have the fuel suppliers asking for cash payment. “So, if you’re operating a flight, you have to cough out N5 million depending on how much you have to pay for supplies in cash for fuel. So, all these contribute to making an already bad situation worse,” he pointed out.

He stated that for the NCAA, the situation has increased the amount of work it has to do because it has had to continue to mount heightened surveillance and ensure that despite the difficulties, airlines comply with the rules and regulations. “So, it’s not the best situation, but we can assure the traveling public that we’re doing our best to work with the airlines to ensure the continued safe operations of all flights. “Over the last couple of years, due to some challenges and some difficulties we’re having in land transportation, aviation has become the preferred means of transportation.

“Aviation sector has become more particularly critical than what it used to be to the economy and with the difficulties the airlines have, it (shutdown of multiple airlines) is going to have a significant impact on economic activities,” he added. Stressing that aviation globally remains a catalyst for economic growth and development, Nuhu said that there has be collaboration of all actors in the sector to find a solution to the crisis. “It’s going to have a negative impact if we have to shut them down due to their inability to continue operating safely because of the difficult situations they have. It is going to have a significant negative impact on the economy. “People can’t travel, businesses will be affected, goods and services cannot be transported. We’re all in this together, including the government, the agencies, the industry,” he explained.

Recently, he recalled that the NCAA had to suspend the operations of Dana Air because it saw the fragile financial stability of the company which could have an impact on safety was unsustainable. “So it’s not the best situation. In fact, it’s a horrible situation we find ourselves in but I keep saying we will keep doing our best to ensure the safety of travellers and sometimes we may take decisions that are not very palatable to the traveling public, but priority for us is safety. “But also,  aviation is business, it is a catalyst for economic growth. So we just have to find a solution to get out of the conundrum the sector finds itself,” he noted. Also speaking, a former Managing Director of the Nigerian Airspace Management Agency (NAMA), Capt. Roland Iyayi, aligned with Nuhu on the cost of fuel, stressing that it has increased by at least five times in the last 24 months.

“The margins airlines have is less than five per cent of their total. So if you’re talking about a situation where fuel, a component that is about maybe 40 per cent or 50 per cent of your cost having gone up, there’s no way you can look at an airline and sustain the same pricing for airline tickets. “So it is impossible to sustain what airlines have been doing over the years. So invariably, what we have now is a situation where it’s been compounded by the fact that there’s a scarcity of foreign exchange for airlines to be able to acquire spares to maintain their operation safely. “So with all of these factors, it’s become very important that airlines actually review their pricing to indicate the current trends. There’s no way they can sustain fares that are below cost, you must produce at a particular cost. And for you to stay in business, it has to be cost plus profit,” he noted.

BY  Chinedu Eze

Nigerian airlines have lost about N4.3 billion annually to airports that provide only daylight service which restrict operators from flying longer hours. Most of these facilities, known as sunset airports, do not have the infrastructure that enables flights to operate into the night, like the airfield lighting; while the Federal Airports Authority of Nigeria (FAAN) limited few that have the infrastructure to only daylight operation, which means flights cannot service such airports after 6:30 pm.

The amount of loss was disclosed by the Chief Operating Officer (COO) of Ibom Air, Mr. George Uriesi at the 26th annual conference of the League of Airport and Aviation Correspondents (LAAC) held yesterday in Lagos. Speaking on the theme of the conference, “Sunset Airports: Economic and Safety Implications, Uriesi said lack of 24 hours flight operations to major routes in Nigeria was impeding the growth of the airlines.

In his paper titled, “Maximising Runway Utilisation: A Nigerian Airline Perspective,’ the Ibom Air Chief Operating Officer said domestic carriers were losing an average of N4 million per flight, N12 million in every flight, N360 million in 90 flights and N4.3 billion annually on every flight lost to sunset airport operations. This restriction, Uriesi noted had led to a huge under-utilisation of aircraft fleets by the Nigerian airlines as against the global industry standards.

“This is due partly because of too many impediments in the operating environment that limit airline productivity. These include limited runway availability across the domestic network, multiple operational infrastructure deficiencies, poor organisation and many others,” he said.

In a bid to solve the challenge, Uriesi appealed to the government to prioritise airfield infrastructure and provide the necessary Instrument Landing System (ILS) and accompanying accessories for every airport, while also keeping the aerodromes open to meet the needs of airlines and other users. He also advised that the government should make approved master plans a regulatory requirement for every airport and make non-adherence to the master plans by any organisation illegal.

 “There is need to establish a local aircraft lessor /financing vehicle that would allow for the domiciling of aircraft payments in local currency. This would make a huge difference to the air transport sector in Nigeria,” he added. Also speaking at the seminar, the Director at the Centre for International Advanced and Professional Studies (CIAPS), Prof. Anthony Kila in his paper: ‘Passenger Experience in Daylight Airports,’ said the NCAA should encourage the airlines to succeed without compromising safety.

 He regretted that the aviation industry was bedeviled with myriads of crises, stressing that the high cost of flights and shutting down of airlines in any country signified a bad omen.

Kila called for total rethink and resetting of the aviation industry by all players in the sector and also canvassed for the establishment of Bank of Aviation, which would make access to foreign exchange by airlines easier.

“We need to act swiftly and decisively to deal with this situation so that this very bad situation we have at hand does not turn into an unmanageable disaster. Decisive actions in this case will require a total rethink and resetting of the way we conceive and manage our aviation manners.

 “There is a prevailing idea in the general public and amongst too many leaders of thought, opinion moulders and indeed policy makers that aviation is a sector that services the elites or the privileged, this is however an anachronistic misconception that needs to be deliberately and assertively corrected.

 “Those who know and can need to find the clarity of mind and courage of voice to explain to the rest of the society that in the times we live in and with the size and structure of Nigeria, aviation has become and will remain a basic and essential infrastructure. With such conception in mind, the role of regulators in the sector will be radically modified. “

 Earlier, the Group Managing Director, Finchglow Holdings, Mr. Bankole Bernard in his speech, warned that the continuous naira depreciation would spell doom for the industry.

(Bloomberg) -- Job openings are near record highs in the US and unemployment is close to a generational low. But one category faces a tougher labor market than average: Young college graduates.

Since the start of 2021, the unemployment rate for those age 22 to 27 with a bachelor’s degree or higher has surpassed the national average every single month, according to data released by the Federal Reserve Bank of New York on Friday. Last month, the gap stood at 0.6 percentage point.

The pandemic era exacerbated a trend that started in mid-2018, when the advantage new graduates had enjoyed for almost three decades on the labor market reversed. From 1990 to 2018, they had a better chance of finding a job compared with other workers, the data show.

The worst period for educated young Americans was the summer of 2020, when millions graduated at the peak of the Covid-19 crisis. Many of them got jobs rescinded by employers as the economy shut down. 

While employment improved for young graduates as the economy reopened, the gap has started to widen again in recent months. In March, the overall unemployment rate, smoothed with a three-month moving average, was 3.8% and that of recent graduates stood at 4%. By June, the national rate had fallen to 3.5%, while that of young graduates had risen to 4.1%.