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Yuletide: Passengers, Stakeholders In A Fix Over Skyrocketing Int’l Airfares - DAILY TRUST
Ahead of the Christmas and New Year festivities, hard times await travellers over the skyrocketing airfares and the depleting flight...
Ahead of the Christmas and New Year festivities, hard times await travellers over the skyrocketing airfares and the depleting flight options, Daily Trust reports.
Experts have predicted tougher times on not only the international front but the domestic routes as the holiday season inches closer following the protracted crisis in the aviation sector, which has contributed to skyrocketing airfares.
Despite recent efforts by the Central Bank of Nigeria (CBN) to pay part of the trapped funds of foreign airlines, findings by our correspondent revealed that the funds belonging to the airlines are still on the high side, and this is partly responsible for the high cost of flight tickets.
Our checks revealed that the airlines’ trapped fund is now estimated to amount to $800million, putting pressure on many airlines.
Emirates Airlines recently suspended flights to Nigeria indefinitely, citing the difficulty in repatriating funds from ticket sales.
In a statement, the airline noted that it was earlier encouraged by the CBN’s response and assurance that the issue would be swiftly resolved with the subsequent clearance of the remaining funds.
It stated, “However, Emirates is yet to receive an allocation of our blocked funds to be repatriated. Without the timely repatriation of the funds and a mechanism in place to ensure that future repatriation of Emirates’ funds do not accumulate in any way, the backlog will continue to grow and we simply cannot meet our operational costs nor maintain the commercial viability of our operations in Nigeria.
“We have officially communicated our position and attended multiple hearings with the Nigerian government. And we have made our proposed approach clear to alleviate this untenable situation, including a plan for the progressive release of our funds.
“This included the repatriation and receipt of at least 80 per cent of our remaining blocked funds by the end of October 2022, in addition to providing a guaranteed mechanism to avoid future repatriation accumulation challenges and delays.
“Under these extraordinary circumstances, Emirates had no option but to suspend flights to and from Nigeria from October 29, 2022, to mitigate against further losses moving forward.”
Our correspondent reliably gathered that Emirates got 50 per cent of the first tranche of the blocked funds, which is about $45million, many of the airlines did not get up to that. In addition, Emirates was said to be worried about the continued accumulation of the funds, hence the decision to suspend flights.
Dubai visa ban
While the Emirates blamed the suspension of flights on the trapped funds, the visa ban on Nigerians by the United Arab Emirates (UAE) authorities also resulted in ban as the load factor on the Dubai route has been shrinking. Nigeria’s airline, Air Peace, also said it would stop flights by next week, November 22, over the same visa ban as there are few or no passengers to carry since the UAE is not issuing visas to Nigerians.
Passengers explore alternatives amidst high fares
With Dubai, one of the most lucrative routes and most frequently visited countries by Nigerians out of the calculation, many passengers are now exploring alternatives amidst high fares.
London, for instance, has always been a regular destination for Nigerians for holidays, business, medical tourism, and education, among others. But many stakeholders, including travel agents and passengers who spoke with our correspondent, said the airfares were not friendly.
A check by our correspondent also revealed that many airlines have not released lower inventories on their websites as fares are still extremely high.
For instance, British Airways’ fare for a one-way Lagos-London flight has not changed from $2,698 to $2,777 for an economy ticket which was the price months ago.
With the price advertised in dollars on its website, it implies a passenger would pay N2.1m at the parallel market rate of N790 to a dollar as of Friday for a one-way flight to London.
A frequent traveller who spoke with our correspondent said, “The airfare is still crazy now, and I can tell you that except it becomes extremely necessary, I don’t think it makes any economic sense to spend millions of naira to travel for holidays.”
“We have to wait till when there is an inflow in forex, which lies majorly with the sale of our crude oil. When you are dealing with the foreign currency you cannot say this is when it is going to stop, except the government would go and borrow in dollars, and specifically for the airlines. That is the only way this thing can go back to normal.”
She said the cheapest fares were still not available on most of the airlines. She disclosed that only British Airways had tried to be flexible, but it is still not like before.
“The cheapest ones are still not back, but there are more options and cheaper ones now on the BA, but some others have not shifted grounds at all.
“Turkish Airlines, Lufthansa, Air France are still selling their highest fares. Of course, Emirates, as usual, has left. People are not even asking for Emirates now because of the uncertainty. You will go and ask for Emirates and they will stop it and everybody will be back to square one, looking for refunds and trying to buy another ticket. They have stopped again,” she added.
She said many people were not travelling out for the yuletide except those coming to Nigeria, who would have to book in the currency of the originating countries.
For Emirates, she advised many travellers to explore African countries or other Arab countries with little or no visa restrictions.
She said, “Normally, for the yuletide period, people really don’t travel out. It is more of Nigerians coming home. The only one that makes Nigerians travel is the UAE, Dubai because Nigerians prefer to do Christmas in Dubai and come back, but Dubai has said we should not come. So everybody will spend Christmas in their village.
“Their leaving or staying doesn’t make any difference because the destinations they go to, other airlines also go to those destinations. It is not an issue of Emirates not going to Dubai, it is an issue of the UAE not allowing Nigerians to come in. Without the visa, you can’t go and you cannot even use any other airline. If you notice, Air Peace has stopped because there is nobody to carry again.
“The only people that can go to the UAE now are those that do not require visa; they have their residence permits and most airlines would start shutting down their Dubai route.”
More airlines may stop flights over trapped funds – AFARN
He urged the government to sit with the airlines and devise a systematic method of defraying the trapped funds.
“The government should sit down with foreign airlines and look at ways to make sure that this problem is addressed. They should come up with a systematic way to make sure that they get their trapped funds. If it is monthly, quarterly, they should design a way out because it grows every day,” he added.
An aviation analyst and Director of Research and Strategy, Zenith Travels, Mr Olumide Ohunayo, said while there was some level of stability on the domestic market, international fares remained high owing to forex crisis.
He said the solution did not lie only on settling the funds belonging to foreign airlines, local carriers must also strive to increase capacity in order to be able to partake in the international market, adding, “Our airlines need to come out of their shelf. We need to stop fighting each other and cooperate to strengthen our flag carriers to participate in the international front.
“On the domestic front, there is relief for passengers because we have increased capacity, ValueJet came on board, Dana has returned. Again, the dollar is going down again. So, there is a bit of stability, aviation fuel has also gone down in price. So there is a bit of stability on the domestic route.
“But on the international front, we still lack capacity and our inability to commit ourselves to fund remittance is affecting airlines. Emirates has pulled out and the ones available are yet to release lower fares. That means the yuletide period would be a tight one for our passengers. Fares would be high and we are sure that most passengers now would have to start buying tickets outside Nigeria as naira tickets are not available and the ones available are also very high.
“The solution is not just remitting this fund, it is also increasing capacity, and the way to increase capacity is for Nigerian airlines to participate.”
Nigerian Passengers In Dilemma As Prices Of Air Tickets Skyrocket Ahead Of Yuletide - SAHARA REPORTERS
Checks also showed that the airlines’ trapped fund is now estimated to amount to $800million, putting pressure on many airlines.
Ahead of the Christmas and New Year festivities, hard times await Nigerian travellers over the skyrocketing airfares and the depleting flight options.
Despite recent announcement by the Central Bank of Nigeria (CBN) to pay part of the trapped funds of foreign airlines, findings revealed that the funds belonging to the airlines are still on the high side, and this is partly responsible for the high cost of flight tickets.
Checks also showed that the airlines’ trapped fund is now estimated to amount to $800million, putting pressure on many airlines.
Emirates Airlines recently suspended flights to Nigeria indefinitely, citing the difficulty in repatriating funds from ticket sales.
In a statement, the airline noted that it was earlier encouraged by the CBN’s response and assurance that the issue would be swiftly resolved with the subsequent clearance of the remaining funds.
It was reliably gathered that Emirates got 50 per cent of the first tranche of the blocked funds, which is about $45million, many of the airlines did not get up to that. In addition, Emirates was said to be worried about the continued accumulation of the funds, hence the decision to suspend flights.
While the Emirates blamed the suspension of flights on the trapped funds, the visa ban on Nigerians by the United Arab Emirates (UAE) authorities also resulted in ban as the load factor on the Dubai route has been shrinking. Nigeria’s airline, Air Peace, also said it would stop flights by next week, November 22, over the same visa ban as there are few or no passengers to carry since the UAE is not issuing visas to Nigerians.
With Dubai, one of the most lucrative routes and most frequently visited countries by Nigerians out of the calculation, many passengers are now exploring alternatives amidst high fares.
London, for instance, has always been a regular destination for Nigerians for holidays, business, medical tourism, and education, among others. But many stakeholders, including travel agents and passengers who spoke with Daily Trust, said the airfares were not friendly.
Checks also revealed that many airlines have not released lower inventories on their websites as fares are still extremely high.
For instance, British Airways’ fare for a one-way Lagos-London flight has not changed from $2,698 to $2,777 for an economy ticket which was the price months ago.
Gunmen abduct more than 100 in Nigeria's Zamfara state - REUTERS
MAIDUGURI, Nigeria, Nov 21 (Reuters) - More than 100 people, including women and children were abducted when gunmen raided four villages in Nigeria's northeastern Zamfara state on Sunday, the information commissioner and residents said on Monday.
Kidnapping has become endemic in northwest Nigeria as roving gangs of armed men abduct people from villages, highways and farms and demand ransom money from their relatives.
More than 40 people were abducted from Kanwa village in Zurmi local government area of Zamfara, Zamfara information commissioner Ibrahim Dosara and one local resident said.
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Another 37, mostly women and children were taken in Kwabre community in the same local government area, the resident added, declining to be named for security reasons.
"Right now Kanwa village is deserted, the bandits divided themselves into two groups and attacked the community. They kidnapped children aged between 14 to 16 years and women," the Kanwa village resident said.
In Yankaba and Gidan Goga communities of Maradun Local government area, at least 38 people were kidnapped while working on their farms, residents said.
Information commissioner Dosara accused the gunmen of using abductees as human shields against air raids from the military.
Reporting by Maiduguri newsroom and Garba Muhammad in Kaduna, writing by MacDonald Dzirutwe Editing by Tomasz Janowski
Nigeria Air project hits stormy weather - PUNCH
EVEN before launching its first flight, the Nigeria Air carrier has run into stormy weather. Last week, a Federal High Court sitting in Ikoyi, Lagos, issued an interim injunction restraining the Federal Government and its partners from taking further action on the proposed airline. This coincided with reports that officials of the Ministry of Aviation are opposed to the management structure proposed by the majority stakeholder and technical partner, Ethiopian Airlines. While the outcome of the court case is being awaited, it is another opportunity to appraise the country’s aviation sector and its revitalisation.
The current turbulence reflects the incoherence and lack of unanimity in the industry. Whereas governments and the aviation industry elsewhere collaborate closely, Nigeria’s situation appears to be the opposite. This is playing out in the Nigeria Air spat.
Displeased with some details of the project in which Ethiopian Airlines has a 49 per cent stake, domestic carriers under the banner of the Airline Operators of Nigeria had approached the court seeking a termination of the deal. They want the court to withdraw the Air Transport Licence issued to the airline by the Nigerian Civil Aviation Authority. The plaintiffs alleged that the company chosen as Transaction Adviser was incorporated only in March 2021 and is linked to the Minister of Aviation, Hadi Sirika. Furthermore, AON alleged that the ATL granted to Nigeria Air evaded the usual security clearance.
Discordance reigns in this critical economic sector. While some operators claim that the incursion of Ethiopian Airlines would send domestic airlines out of business, others disagree. Sirika argues that the carrier is part of the government’s aviation roadmap and would create jobs. He insisted that stakeholders were actually carried along “at every step” and believed the court would vindicate him.
The sector needs revamping through visionary government leadership working in collaboration with private capital. The collapse of the state-owned Nigeria Airways has been followed by the crash of several once-thriving private airlines. Only a few domestic carriers remain going concerns, many others struggle.
Though the IATA estimates that Nigeria’s air transport industry contributes about $600 million to annual GDP, and together with tourism, hospitality, and on-site enterprises employs 20,000 persons and supports another 35,000 jobs, the industry is nowhere near its full potential. In South Africa, the industry provides $5.2 billion of GDP and along with the hospitality and tourism sub-sectors supports 472,000 jobs.
As this newspaper has articulated repeatedly, transforming the sector requires policy initiatives liberalising the operating environment to attract investment. The government rolled out an Aviation Sector Roadmap targeting $14.16 billion contribution to GDP, but Sirika and the President, Major General Muhammadu Buhari (retd.), have been slow in driving reforms, especially in infrastructure provision.
The regime has been foot-dragging on the plan to concession four international airports – Lagos, Abuja, Port Harcourt and Kano — despite statements of such intent dutifully repeated during every national budget consideration cycle.
Instead, both men are obsessed with the state-sponsored national carrier dream, which they incorporated in the roadmap. Sirika’s argument that Nigeria needs one to take advantage of the 80 Bilateral Air Service Agreements it has with other countries is valid. But a government-promoted carrier is a wrong approach. The United States and Western European countries have the largest aviation industries outside China, but their carriers are not government-sponsored enterprises. Most European Union countries have largely privatised their formerly state-owned carriers.
Having one or even multiple national carriers is a desirable objective; but given Nigeria’s odious experience with state-backed commercial enterprises, one that is a government initiative unsettles stakeholders. Past efforts to float a national carrier floundered as major international players avoided doing business with Nigerian officialdom. The country’s reputation for contract violation, policy changes, corruption and bureaucratic muddle has played out in failed partnerships with Virgin Atlantic, KLM and others in the past.
For an emerging economy with its physical size, population and resources, stimulating the aviation and ancillary sectors by liberalising the operating environment will promote domestic and foreign investment. The government should set parameters and designate the best domestic private airlines to utilise the BASAs. Experience around the world proves that enabling private airlines’ growth through competition is better than pouring public funds into failing state enterprises. The government’s role should be restricted to creating a competitive environment for private investment.
Certainly, some world class airlines, including Ethiopian Airlines, are state-owned, but Nigeria has a terrible record in managing state enterprises. Absence of a strong national carrier is a symptom of the sector’s malaise, not the problem. Though the Federal Government holds only five per cent equity in Nigeria Air, the usual cloud of controversy associated with official transactions is already enveloping it.
The government should rather solve the industry’s problems. One is under-investment; privatisation and liberalisation will facilitate investment in airports and hospitality. Redressing the absence of large domestic hangars to undertake routine aircraft maintenance should also be a priority to conserve the N1.04 trillion the Federal Airports Authority of Nigeria says the economy loses yearly to the routine servicing of Nigerian-flagged aircraft abroad.
Effective regulation and investment in advanced navigation aids should be Sirika’s priority, and the government should also solve the aviation fuel scarcity crisis. The AON says over 70 domestic carriers have collapsed in recent years; enabling some to revive and new ones to emerge is the right way to go.
Through fiscal incentives, provision of modern technology, Ireland is a major international aviation hub and according to Cogency Global, a consultancy, over 50 per cent of leased airplanes operating worldwide have a connection to Ireland. Once state-owned, British Airways is now privately-owned by an Anglo-Spanish consortium, and Britain has also privatised its airports.
When the legal dust settles, Buhari and Sirika should implement the airports concession plan, liberalise the operating environment to attract investments, and facilitate the emergence of large, resilient Nigerian airlines. Governments should hands off commercial enterprises entirely and concentrate on regulation and supporting economic sectors.
Berlin Airport Briefly Halts Flights as Protesters Occupy Runway - BLOOMBERG
(Bloomberg) -- Berlin’s airport briefly halted take-offs and landings Thursday evening after climate protesters broke through the airfield’s security perimeter and occupied the runway.
“Several people” were on the airfield as of 5.35 p.m. local time, Berlin Brandenburg Airport said on its official Twitter account. In an update, the airport said flights had resumed but with delays.
Letzte Generation, a group that argues governments, businesses and citizens aren’t doing enough to cut greenhouse gas emissions, issued a statement saying its activists were responsible.
“While some of them are glued to the asphalt, others are riding bicycles across the maneuvering area, bringing air traffic to a standstill,” the group said on its website. “Shortly before entering the airport premises, they informed the police of their plans via an emergency call.”
Letzte Generation, or Last Generation in English, has conducted a series of protests in recent days including at a symphony concert in Hamburg, where according to media reports activists glued themselves to the conductor’s podium.
Net Migration to UK Rises to Record of Half a Million People - BLOOMBERG
(Bloomberg) -- Net migration to the UK hit a record high of half a million people, driven by the arrival of international students following the end of Covid-19 restrictions, as well as resettlement programs for Ukrainians, Afghans and Hong Kongers.
An estimated 504,000 more people moved to the UK than departed in the year to June 2022, according to Office for National Statistics data released on Thursday. That’s up from 173,000 the previous year.
The figures will pile pressure on Prime Minister Rishi Sunak from his ruling Conservative Party to move quickly in cutting immigration, after he rebuffed calls from businesses on Monday to make it easier for them to hire workers for overseas. The numbers are also likely to raise concerns among proponents of Brexit, many of whom campaigned for Britain’s divorce from the bloc on the grounds that the country would be able to regain control of its borders and bring down the number of people moving to the UK.
Instead, the ONS said in its statement that the data for the first full period under Britain’s new post-Brexit regime show long-term immigration at a record. It said the 12 months to June were a “unique” period, “with simultaneous factors coinciding to affect long-term immigration.”
“These include the end of lockdown restrictions in the UK, the first full period following transition from the EU, the war in Ukraine, the resettlement of Afghans and the new visa route for Hong Kong British Nationals (Overseas),” Jay Lindop, director of the ONS’s Centre for International Migration, said in the statement.
The numbers reflected a huge rise of migrants from outside the EU, “specifically students,” according to the ONS. Net migration of EU nationals fell.
Colombian airlines Avianca, Viva appeal against merger denial - REUTERS
BOGOTA (Reuters) - Colombian airlines Avianca and Viva have appealed to the aviation regulator after it denied their plan to merge, proposing steps to allay its concerns, such as yielding some routes to competitors, the companies said on Wednesday.
In an April agreement to merge the airlines envisaged retaining their respective brands and business strategies as the travel sector struggled with the COVID-19 pandemic.
But the governing body of Colombia’s civil aviation regulator objected, saying the merger posed risks to competition and the best interests of consumers.
Plans to address these concerns include reducing operations at El Dorado airport in the capital, Bogota, maintaining Viva’s brand and low-cost model, adding employees and maintaining the cost of flights on some routes, Avianca said in a statement published on Wednesday.
The airlines also expressed interest in working with state-owned Satena to boost links to Colombia’s most remote regions.
Viva faces a complex financial situation after the pandemic brought a slowdown in travel, worsened this year by rising fuel prices and a weaker peso currency.
Avianca said the appeal and measures it was proposing would improve Viva’s finances, yielding benefits for employees and suppliers. It said it would also seek to meet traveler demand if authorities made it impossible to boost Viva’s financial health.
In May, Brazilian airline Gol Linhas Aereas Inteligentes SA and Avianca unveiled a pact to set up a Latin American air transport holding company called Grupo Abra, putting brands under the control of a single company.
Avianca, which wrapped up a bankruptcy restructuring process at the end of last year, has one of the largest operations in the region, with more than 130 aircraft and 12,000 employees.
Viva, with a fleet of 23 aircraft, has about 1,000 direct employees.
Reporting by Luis Jaime Acosta; Editing by Clarence Fernandez
Airbus to Settle French Bribery Case Linked to Libya, Kazakhstan - BLOOMBERG
(Bloomberg) -- Airbus SE said it reached an agreement with French prosecutors to settle probes into corruption allegations linked to Libya and Kazakhstan.
The deal represents “a limited extension” to a €3.6 billion ($3.75 billion) settlement with French, British and American authorities reached in 2020, Airbus said Thursday, adding that all issues couldn’t be dealt with simultaneously at that time for procedural reasons.
The Parquet National Financier prosecutors office confirmed to Bloomberg that an accord was reached with Airbus on Nov. 17 concerning acts of bribery of foreign public officials relating to sales campaigns in Libya and Kazakhstan between 2006 and 2011.
The deal still needs to be reviewed -- and possibly approved -- by a French judge during a court hearing on Nov. 30. It would typically include a fine but no admission of guilt. No value was specified by Airbus or the PNF.
The planemaker said the latest settlement “will have no adverse impact” on the earlier agreements with France, the UK and US.
Read More: Airbus to Pay Record $4 Billion to End Global Bribery Probe
Reuters reported on the deal earlier on Thursday.
London City Airport to Scrap Laptop and Liquids Rule From April - BLOOMBERG
(Bloomberg) -- Passengers flying through London City Airport will be able to leave laptops and liquids in their bags when passing through security from next year.
The hub, which is currently trialling one security lane equipped with next-generation baggage scanners, plans to introduce the machines on all its lanes by April as part of a partnership with Leidos Holdings Inc., it said in a statement Friday.
London City said it will be one of the first airports in the UK to offer a full CT -- or computed tomography -- security proposition.
The airport is popular with business travelers for its short boarding times and proximity to both the City and Canary Wharf financial centers. The UK isn’t the first country to introduce the new technology, though. Airports including Amsterdam Schiphol and Helsinki, as well as several in the US, have CT baggage scanners that generate a 3-D image that can be viewed and rotated on three axes.
Foreign students to reportedly be barred from UK unless studying at top universities - BLOOMBERG
KEY POINTS
- Foreign students wanting to study in Britain may be turned away unless they have secured a place at a “top university,” according to a report by The Times newspaper.
- The plans come as the Conservative government attempts to reduce net migration, as pledged in its 2019 manifesto.
- A record 504,000 people immigrated to the U.K. in the year to June, according to the Office for National Statistics.
The U.K. government is looking to reduce migration, which could impact international students’ ability to study in Britain.
LONDON — Foreign students wanting to study in Britain may be turned away unless they have secured a place at a “top university,” according to a report by The Times newspaper.
Ministers were allegedly discussing how to reduce flows to the U.K. after record levels of net migration were reported on Thursday.
According to the report, there will also be restrictions on how many family members the students are able to bring into the country with them. The rules will also only apply to foreign students who aren’t already living in the U.K.
Roughly 1.1 million people arrived in the U.K. in the year to June, with around 560,000 emigrating in the same period, leaving net migration at a record 504,000 people, according to the Office for National Statistics on Thursday.
The reported plans to deter foreign students from studying in Britain seem to go against the government’s International Growth Strategy from 2019, which was designed to increase the number of international students studying in the U.K. each year to 600,000 by 2030.
That target was reached in the 2020/21 academic year when more than 605,000 non-U.K. students enrolled in higher education, according to the Higher Education Statistics Agency.
The strategy was originally put in place to “support the UK education sector to access global opportunities,” according to the government website.
A representative for the Home Office said there would be no comment on the “speculation” around the idea that foreign students may be prevented from entering the U.K.
It did, however, provide a statement from Interior Minister Suella Braverman, who said it was “understandable” record numbers of people travelled to the U.K. in light of the war in Ukraine, the evacuation in Afghanistan and the crackdown on rights in Hong Kong, but that the British public “rightly expect” migration to be reduced over time.
“This level of migration has put pressure on accommodation and housing supply, health, education and other public services. We must ensure we have a sustainable, balanced and controlled approach which is why we continue to keep our immigration policies under review,” Braverman said in the statement.
“My priority remains tackling the rise in dangerous and illegal crossings and stopping the abuse of our system. It is vital we restore public confidence and take back control of our borders,” she wrote.
The Conservative government has launched a series of initiatives after pledging to reduce net migration to the U.K. in its 2019 manifesto, including its controversial plans to deport migrants to Rwanda and deals with France to target small boat crossings.
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