JUNE 20, 2023

Airfares on Nigeria routes to various destinations in Europe, North America, Middle East and other foreign cities have skyrocketed as exchange rate for ticket pricing hits N702/$, according to findings by The PUNCH.

The development came barely one week after the Central Bank of Nigeria floated the naira and directed commercial banks to sell foreign exchange at market-determined rates.

As part of its moves to end multiple exchange rates that have left to the exit of several investors from Nigeria, the CBN last week introduced new forex guidelines aimed at unifying the nation’s exchange rate.

Among others things, the CBN said all forex windows should be collapsed into the Investors &Exporters Window.

About 24 hours after the decision, the naira traded at 664.04/dollar at the I&E window. Two days later, the local currency closed at 702.19/dollar at the close of business on Thursday.

Following the development, findings by The PUNCH on Monday revealed that exchange rate adopted by the International Air Transport Association for ticket pricing in Nigeria rose to N702/dollar.

In previous months, the exchange rate adopted by international airlines for ticket pricing had risen consecutively from about N445/dollar to about N660/dollar about two weeks ago.

However, the latest move by the CBN has made IATA to adopt the exchange rate on the I&E Window.

Prior to the latest development, IATA used to adopt NAFEX rate published on the FMDQ Exchange.

The development came as summer travel season began a week ago with ticket prices rising by 25 per cent.

Travel operators told our correspondents that ticket prices had gone up significantly with several operators raising concerns the hike in the exchange rate could mar the summer travel plans of many Nigerians.

The President of the National Association of Travel Agents of Nigeria, Susan Akporiaye, while reacting to the current development, expressed disappointment lamenting that passengers would suffer the most from the increment.

 “Fares will definitely increase and passengers have to pay more. As a result, Passengers won’t travel as much as they should and this will affect travel agents,” she said.

Also, the Chief Executive Officer, Corporate Travels, Mr. Akande Diran, while reacting, said, “Around mid-June, ticket prices always go up. We call it peak period. This is so because many people often go on vacation during this period. Apart from this, the rising exchange rate will lead to higher ticket prices.”

The development came amid difficulty in repatriating millions of dollars of ticket sale proceeds by foreign airlines in Nigeria.

However, experts believe the latest move by the CBN will ease the process.

Regional Vice President, Africa and Middle East, IATA, Kamil Alawadhi, said the trapped funds had risen to $812m as of April 2023. He spoke at the IATA Annual General Meeting held in Istanbul two weeks ago.

JUNE 21, 2023

Says Tinubu-led economic reforms’ll attract UK investors

By Johnbosco Agbakwuru, Abuja

The British High Commissioner to Nigeria, Richard Montgomery, Wednesday, said that the decision by the United Kingdom, UK, government’s decision to ban international students from bringing family members with them starting from 2024 is to avoid overburdening the country’s housing infrastructure and to control the inflow of migrants.

Montgomery stated this while speaking with State House correspondents after holding a closed-door meeting with Vice President Kashim Shettima, at the Presidential Villa, Abuja.

This came one month after the new British diplomate to Nigeria handed his letters of Credence to former President Muhammadu Buhari on May 18.

According to him, “Many more students are trying to bring their dependents with them…but it’s not always possible to find the housing and services to meets all the needs of all our existing student population…we’ll have to manage our migration in and out of the UK.”

Recall that on May 23, the UK Home Office said international students, including Nigerians, would no longer be able to bring family members with them starting January 2024.

It also announced that overseas students would be stopped from switching from the student visa route to a work visa until their studies have been completed.

The decision has been greeted with mixed reactions from international students, schools, and some British lawmakers who argued that the regulation would aggravate labour shortages in critical sectors such as healthcare and threaten the country’s global standing as a top destination for international talent.

Fielding questions from journalists, the British High Commissioner gave reasons for the regulation saying, “I think there are two issues here. The first is, it’s not always possible to find the housing and services to meets all the needs of all our existing student population.”

“And second, reasonable people would accept that we have to manage our visitor numbers and we’ll have to manage our migration in and out of the UK just as the Nigerian government would do,” he added.

Montgomery revealed that Nigerian students coming to the UK had increased fivefold in the last three years, even as they make up 10 per cent of those granted UK visas annually.

“That issue was not raised in the meeting (with the Vice President) just now. But I would like to put the media debate about it in a broader context. Last year (2022), for example, the UK granted three million new visas, of which 325,000 were to Nigerians.

“Nigerian visitors constitute over 10 per cent of the people coming to London and the UK.

“It’s a fantastic success story for our universities. And we are really delighted that so many Nigerians are coming to the UK,” he said.

He revealed that his discussions with the VP highlighted the current policy direction of the Bola Tinubu administration, which, he said, is being warmly received by UK investors.

Hear him, “As I discussed with His Excellency, the big economic decisions being taken by this government are really important and are being noticed around the world: the removal of subsidy, the exchange rate reform, all of that create a much better investment environment.

“I was in London last week; I was briefing my ministers, but I was also talking to British business in finance, banking and investment sectors. They are all responding very positively to these first decisions.”

He further said that the discussions also featured areas of assistance by the British government to cushion the effects of the discontinuance of petroleum subsidy, which has spelt “tough times” for Nigerians.

He said, “We know that there are tough times that are going on at the moment, inflation and unemployment.

“The vice president and I also touched on some of the measures that might be possible to cushion the blow of some of these economic pressures.

“But I think the big issue is that these reforms help put Nigeria on a higher growth path; they will attract more investments and the United Kingdom and the city of London see Nigeria as a big opportunity going forward. I will be doing my part to try to boost those, enhance trade and investment.”

JUNE 21, 2023

Cost of air fares from Nigeria to various destinations is set to rise by over 50 percent as exchange rate for ticket pricing hits N770/$, BusinessDay’s findings show.  The development is coming few days after the Central Bank of Nigeria floated the naira and directed commercial banks to sell foreign exchange at market-determined rates.

The CBN said all forex windows should be collapsed into the Investors &Exporters Window.

Days after the decision, the exchange rate has since fluctuated on the International Air Transport Association (IATA) platform from 663.04/$ to N770/$.

Already air fares are increasing as a result of the increase in exchange rate.

BusinessDay’s findings show that Air fares for economy class tickets between Tuesday and Wednesday show a sharp rise by N200,000 to N250,000.

Experts say if the exchange rates continue to rise, an economy class tickets may rise from N1.2 million to as high as N1.8 million and above, while for the business class, the fares may rise from N4million to N6 million or more.

As at 2021, a dollar was being accessed at the official rate of N444 for one dollar by airlines. But it jumped to over N577 to a dollar in 2022.

“This is not the first time the exchange rate is going up. Since the president mentioned the devaluation of the naira in I and E window, the exchange on the IATA platform has not been stable.

“It has since fluctuated from N660/$ to N663/$, to N702/$ and today it is N770/$. The prices of tickets are determined by the I &E window not IATA,” Susan Akporiaye, the President of the National Association of Travel Agents of Nigeria, (NANTA) told BusinessDay.

Akporiaye explained that tickets are sold at the rate the I & E window closes for that day, which has since been determined by the deregulation of the naira and allowing the price to be determined by the I & E window.

“Tomorrow prices may drop. For now, the prices of tickets cannot be determined until point of purchasing the tickets. Anytime we are giving anyone any price, we emphasize that price is not valid until people are ready to buy. Just today prices of tickets have gone up by N250,000. The N770/$ is the highest the exchange rate has gone so far,” she said.

JUNE 21, 2023

(Bloomberg) -- The search for a diving vessel that was headed to the wreck of the Titanic has shifted underwater after air efforts failed to find the craft, which has five people onboard and about 40 hours of oxygen left. 

The US Coast Guard and the Canadian Joint Rescue Coordination Centre in Halifax, Nova Scotia, have been conducting surface search missions overhead in the North Atlantic since Monday afternoon. OceanGate Expeditions, the operator of the mission, is leading underwater search efforts because of its knowledge of the site, Coast Guard Rear Admiral John Mauger said. 

“There is a full-court press effort to get equipment on scene as quickly as we can,” US Coast Guard Captain Jamie Frederick said at a news briefing in Boston Tuesday.

The Titan submersible vessel was designed to have an oxygen supply of as much as 96 hours in case of an emergency, according to the Coast Guard. Frederick said the 40-hour estimate of breathable oxygen remaining is based on that number. 

France has dispatched a research vessel, the Atalante, equipped with an underwater robot that can reach as deep as 4,000 meters (13,123 feet). French pilot Paul-Henry Nargeolet is reported by several newspapers to be aboard the Titan, a 6.7-meter-long craft made of carbon fiber and titanium. 

“The idea and our wish is for the ship to arrive as soon as possible, which should be Wednesday at 8 p.m. local time,” Herve Berville, French secretary of state in charge of the sea, told BFMTV, a French CNN affiliate. 

The US Transportation Command is sending three C-17 transport jets from Buffalo, New York, to St. John’s, Newfoundland, carrying commercial equipment considered useful for the search, according to a command spokesman. The New York Air National Guard’s 106th Rescue Wing is assisting the Coast Guard, Governor Kathy Hochul said.

The Coast Guard received a call Sunday from the submersible’s command ship, the Polar Prince, saying it lost contact with the vessel about 900 miles (1,450 kilometers) east of Cape Cod, Massachusetts, according to Lt. Samantha Corcoran, a Coast Guard spokesperson in Boston. A C-130 plane with radar capability was dispatched to search the area Sunday, and was joined Monday by a Canadian P-8 Poseidon, an aircraft designed for anti-submarine warfare. “We’re focused on the search and hoping to safely locate all five individuals,” Corcoran said.

OceanGate Expeditions said in a statement it was “exploring and mobilizing all options to bring the crew back safely.”

The Titan carries a pilot and four crew to a maximum depth of 4,000 meters and can monitor their health in real time. The system provides “early warning detection for the pilot with enough time to arrest the descent and safely return to surface,” according to OceanGate’s website.

Among those also missing is Hamish Harding, chairman of Action Aviation, according to Mark Butler, managing director of the Dubai-based aircraft brokerage. In a Twitter post Sunday, the company said “the sub had a successful launch and Hamish is currently diving.”

Two other members of the crew, Engro Corp. Vice Chairman Shahzada Dawood and his son Suleman, are from one of Pakistan’s most prominent business families. A statement from the Dawood family said there was little information about what had happened.

According to several newspapers including the Australian, Stockton Rush, founder and chief executive officer of OceanGate is also on board. The company didn’t reply to an email seeking to confirm those details.

Harding posted on social media two days ago that the area was experiencing its worst weather in 40 years.

“A weather window has just opened up and we are going to attempt a dive tomorrow,” he wrote. “This mission is likely to be the first and only manned mission to the Titanic in 2023.” 

The guests pay $250,000, according to the New York Times, which first reported the rescue operation. 

OceanGate says it offers 10-day expeditions to the Titanic site, providing “qualified explorers” the opportunity to join as mission specialists, surveying the wreckage and documenting the sunken vessel’s condition, as well as flora and fauna inhabiting the wreck site. The fees underwrite their training and the participation of the science team exploring the ship that sank in 1912 on its maiden transatlantic voyage after hitting an iceberg. 

Everett, Washington-based OceanGate ran expeditions to explore the wreck in 2021 and 2022, according to its website. A photo of a submersible and the Titanic dive operations was posted on its Twitter feed on June 1.

--With assistance from Faseeh Mangi and Tony Capaccio.

(Updates with Coast Guard comments starting in first paragraph)

JUNE 22, 2023

E-hailing platform, Uber Nigeria has announced an increase in fares to help drivers cover the recent increase in fuel costs and inflation rate.

Uber, in a statement attributed to Tope Akinwumi, Country Manager for Uber in Nigeria said the fare adjustment is designed to help drivers cover rising operating costs and is part of the ongoing efforts to support their driver community.

“Drivers are at the heart of everything we do, and we continue to work on initiatives and engage with drivers to help make Uber the app of choice for drivers while maintaining an affordable service for riders.

“Following an in-depth review of the current fuel subsidy removal, Uber updated fares on the 3rd and 9th of June on the app to reflect existing economic conditions.

“We believe these changes have helped better support drivers in increasing their earning opportunities. Furthermore, we lowered the service fee in February 2022 from 25% to 20% to help enable better-earning opportunities for drivers.

“We want the best for drivers who operate on the Uber platform and frequently engage with them directly through roundtables, surveys, phone, and in-app channels to better understand and receive feedback on the realities they face in their businesses,”  Akinkunmi said

The company also said that it is constantly monitoring local dynamics to see what changes can be implemented and when.

Uber also said that its service fee ensures the running of the Uber App and helps it maintain and make continuous investments to enhance its technology designed to meet the needs of riders and drivers.

The company claimed that drivers on its platform earn more than other ride-hailing platforms in Nigeria.

JUNE 23, 2023

By Olaniyi Apanpa

E-hailing platform, Uber Nigeria has announced an increase in fares to help drivers cover the recent increase in fuel costs and inflation rate.

Uber, in a statement attributed to Tope Akinwumi, Country Manager for Uber in Nigeria said the fare adjustment is designed to help drivers cover rising operating costs and is part of the ongoing efforts to support their driver community.

“Drivers are at the heart of everything we do, and we continue to work on initiatives and engage with drivers to help make Uber the app of choice for drivers while maintaining an affordable service for riders.

“Following an in-depth review of the current fuel subsidy removal, Uber updated fares on the 3rd and 9th of June on the app to reflect existing economic conditions.

“We believe these changes have helped better support drivers in increasing their earning opportunities. Furthermore, we lowered the service fee in February 2022 from 25% to 20% to help enable better-earning opportunities for drivers.

“We want the best for drivers who operate on the Uber platform and frequently engage with them directly through roundtables, surveys, phone, and in-app channels to better understand and receive feedback on the realities they face in their businesses,”  Akinkunmi said

The company also said that it is constantly monitoring local dynamics to see what changes can be implemented and when.

Uber also said that its service fee ensures the running of the Uber App and helps it maintain and make continuous investments to enhance its technology designed to meet the needs of riders and drivers.

The company claimed that drivers on its platform earn more than other ride-hailing platforms in Nigeria.

 

JUNE 23, 2023

BY  Chinedu Eze

Stakeholders in the aviation industry have raised concern over the uncertainty that has beclouded international travel from Nigeria due to the escalation of airfares in response to the depreciation of the Naira.

Critical stakeholders told THISDAY that airfares has became unpredictable stressing that the development has subjected travellers to undue suffering.

According to him to the former President of the National Association of Nigeria Travel Agencies (NANTA), Aminu Agoha, it is becoming increasingly difficult to source funds to pay for tickets adding that projections could be off the mark because of the fluidity in the change of fares.

“Depending on destination and route, airfares have increased so suddenly and this is impacting seriously on air travel. As at Wednesday this week, the fares have changed. So, today it is a different fare and tomorrow you get yet another different fares. This is not healthy for the industry and the economy. Customers are groaning. Many of them do not know what to do again. Yesterday we exchanged at N663 per dollar, but today it has gone up to N770. Definitely, it will have negative impact on the tickets,” he said.

Meanwhile, international airlines have indicated that henceforth they would adopt exchange rate at N770 per dollar from N663 per dollar on Nigerian routes, which is about 20 per cent increase.

This is as the International Air Transport Association (IATA), on Wednesday, pegged $1 to N770.

Agoha said the blocked funds have contributed to the high airfares on Nigerian routes.

“Economy ticket from Lagos to London used to cost about N400,000 in 2021 but had increased to about N1.2 million in 2022 and would further increase from the middle of 2023.  Also, business class ticket rose to about N6 million during the same period, depending on the airline and time of booking. This has the potential to increase further, unless the naira stabilizes, “he said.

On his part, the Head of Business Development, Zenith Travels and the spokesman of Aviation Round Table (ART), Olu Ohunayo, told THISDAY that the unification of the official and parallel market exchange rate has impacted on the I & E window and has even risen higher than the previous black-market rates.

He said what this would result to is that fares would definitely increase because the rate of exchange that is used to determine the fares impact mainly on the international airlines, noting that it would also impact on domestic airlines on cost of fuel, insurance and spares.

He noted that the impact of the new exchange rate on international travel would be more drastic because it would catapult the fares both on business class and the economy class, adding that there is no enough capacity, “so, the ones available would be on very high demand so the airlines would use this window of exchange rate unification to jerk up fares.”

Ohunayo said there were also certain regulations they were put in place in Europe, like getting Schengen visa if the traveller would pass through the continent during his trip to other destinations.

He said this has made travellers want to travel directly to their final destinations and this has made direct flights more expensive than those that connect flights from other destinations, like stopping in Addis Ababa from Lagos to connect another flight to China or Dubai.

“So, passengers should look out for non-direct flights if they really want fares that are relatively low. Flights that the passenger can spend some time on the hub airport before he connects his flight are better. Travellers should also strive to buy their ticket early in order to avoid paying highly for tickets because if you buy tickets closer to the time you want to travel you pay more.

“But as we are trying to bridge the gap and have a unified exchange rate, it is important that we provide more capacity. When there is enough capacity that the supply of seats meets the demand, that is when fares can be forced down. We need to throw in capacity and ensure that our flag carriers are designated to international destinations, but not just designating them but pushing to make sure they get all the necessary approvals on the other side. This will enable them to reciprocate the flights by other airlines. The Ministry of Justice, Foreign Affairs and Ministry of Aviation should work together to ensure that our airlines are designated. It is what is given to your airline that you reciprocate in the Bilateral Air Service Agreement (BASA) and commercial agreement for international airlines. If they give you 21 slots, you give them 21 slots and they should also give your airlines the airports they want. On the equipment side, we need to increase capacity on international routes,” Ohunayo said.

Last month, IATA said that funds belonging to foreign airlines trapped in Nigeria had hit $812.2 million, warning that rapidly rising levels of blocked funds are a threat to airline connectivity in the affected markets.

The industry’s blocked funds have increased by 47 per cent to $2.27 billion in April 2023 from $1.55 billion in April 2022. 

The top five countries that account for 68.0 per cent of blocked funds are Nigeria with the highest trapped funds ($812.2 million), Bangladesh ($214.1 million), Algeria ($196.3 million), Pakistan ($188.2 million), Lebanon ($141.2 million).

IATA’s Director General, Willie Walsh said: “Airlines cannot continue to offer services in markets where they are unable to repatriate the revenues arising from their commercial activities in those markets. Governments need to work with industry to resolve this situation so airlines can continue to provide the connectivity that is vital to driving economic activity and job creation.”

JUNE 23, 2023

(Bloomberg) -- Junior doctors in England will strike for five consecutive days over pay next month — the longest single walkout in the history of the National Health Service, according to the British Medical Association.

The strike will take place between July 13-18, the BMA said in a statement on Friday. The trade union, which represents UK doctors, said it heard nothing from Prime Minister Rishi Sunak or Health Secretary Steve Barclay about reopening negotiations since the collapse of talks earlier this year.

The extended protest is a fresh blow to Sunak, who is under pressure to tackle soaring inflation that has triggered a mortgage crisis, squeezing the finances of millions of borrowers. He’s also pledged to reduce hospital waiting lists.

But hundreds of thousands of appointments have been canceled in the dispute with doctors, who are demanding a substantial pay rise, and there have been warnings about the safety of hospitals with thousands of medics off work. 

“It puts patient safety and our efforts to cut waiting lists at risk, and it’s obviously extremely disappointing,” Sunak’s spokesman, Max Blain, told reporters at a regular briefing Friday when asked about the strike.

The government had made a “fair and reasonable opening offer” to the BMA, Blain said, but “they chose to end the talks.” He said ministers were open to fresh talks if doctors called off their walkout.

The BMA said junior doctors, who are qualified doctors with as many as eight years’ experience but are still in clinical training, were being “inundated” with opportunities to work abroad, including in Australia. The BMA blamed government “neglect” of the medical workforce, pointing out that the striking doctors are paid £14 ($17.80) an hour.

With a general election expected next year, the prime minister is facing growing calls to get a grip on ongoing strikes that have been hitting public services for months. Some 20,000 railway workers will also walk out over pay on July 20, 22 and 29, the RMT union said Thursday.

(Updates with government response in fourth paragraph.)

JUNE 24, 2023

OTTAWA — New figures from Statistics Canada show Canadians are taking more trips outside the country this year compared with 2022, but travel hasn't yet returned to pre-pandemic levels.

Statistics Canada says Canadians residents took 875,900 return trips overseas in April, up 23.6 per cent from the same month in 2022.

In comparison, the federal statistics agency says Canadians took 1.2 million trips abroad in April 2019, before the pandemic.

Canadian travel across the border to the United States is also on the rise.

Statistics Canada says Canadian residents returned from 3.2 million trips to the U.S. in April, up 53.4 per cent from the number of trips taken in April 2022.

The agency says Canadian travel to the U.S. in April reached 83.7 per cent of the level from the same month in 2019.

Meanwhile, Statistics Canada says 373,200 overseas residents arrived in Canada in April, up 54.4 per cent over the same month a year earlier.

The agency says the number of overseas residents arriving in Canada in April was three-quarters the number from 2019.

This report by The Canadian Press was first published June 23, 2023.

The Canadian Press

JUNE 24, 2023

WestJet Airlines’ decision to wind down Sunwing Airlines and integrate the carrier into its mainline business will result in less competition and higher prices for Canadian air travellers, according to industry experts.

“There’s going to be consolidation, there’s going to be a reduction in air service as a result of this consolidation, and there is going to be an increase in price,” John Gradek, a faculty lecturer of aviation management at McGill University, said in an interview with Yahoo Finance Canada.

“There is no doubt in my mind.”

The airline unveiled its plan to shut down Sunwing Airlines and fold it into WestJet in an internal memo to employees that was obtained by The Canadian Press on the weekend. WestJet confirmed in a statement on Monday that it plans to integrate Sunwing Airlines into its main operations, but that the process will not start before 2024.

The announcement comes shortly after WestJet said it would shut down its low-cost carrier Swoop.

“We are confident that the future integration of Sunwing Airlines into the WestJet Group, following that of our ultra-low-cost carrier Swoop will significantly enhance our ability to provide affordability and choice to our guests," Alexis von Hoensbroech, WestJet’s chief executive officer, said in a statement.

"As the strongest airline in Western Canada and the biggest vacation provider across the entire country, the integration of Swoop and eventually Sunwing Airlines into the WestJet Group will enhance affordability and serve to increase choice for Canadians for their air travel and vacation plans."

WestJet completed its acquisition of Sunwing Vacations and Sunwing Airlines in May after the federal government approved the deal, despite concerns raised by the Competition Bureau. In a report delivered to Transport Minister Omar Alghabra in Oct. 2022, the Competition Bureau said WestJet’s acquisition of Sunwing “would likely result in increased prices, less choice and decreases in service for Canadians.”

Gradek agrees, and says he expects that prices will likely go up for vacation packages as WestJet integrates Sunwing’s operations into its own.

“You’re going to see Sunwing expand its presence in the marketplace, because they have a lot more airplanes to play with,” Gradek said.

“So you’ll have more choices, but I don’t think they’ll be at the rock bottom prices that people may have previously seen with Sunwing.”

Aviation consultant Rick Erickson said Air Transat and Air Canada will ensure a healthy mix of competition for sun destinations, but that travellers in smaller markets ranging from Saskatoon to St. John's, N.L., may well have to shell out more.

Fares have already been on the rise in an environment marked by pent-up demand. According to aviation data firm Cirium, out of more than 180 sun destinations – mostly in Mexico, California, Arizona, Florida, and the Caribbean – prices went up in 87 per cent of cases. For example, fares from Canada to Key West, Fla. increased 23 per cent.

Air passenger rights advocate Gábor Lukács said the Sunwing acquisition should not have been approved by the federal government to begin with.

“It doesn’t really matter what WestJet does now with the branding of Sunwing. That’s really just about the paint you put on the plane,” Lukács said in an interview.

“It is still one controlling company making the business decisions... The impact of this is higher prices, worse service for consumers and ultimately less competition.”

With files from the Canadian Press

Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.