Travel News

(Bloomberg) -- The US new-car market is returning to pre-pandemic norms as supply-chain issues resolve, forcing carmakers to ramp up deals to sustain sales growth.

The annual pace of new-car sales likely rose to 15.6 million in June, from 13 million a year ago, according to the average forecast of seven market researchers. Cox Automotive raised its full-year forecast to 15 million, from 14.2 million in March, as deliveries to businesses and rental-car companies, which evaporated during pandemic scarcity, rebounded.

“Pent-up demand from individuals and business that couldn’t find product last year is now being unleashed,” Charlie Chesbrough, senior economist at Cox, said on a call with reporters this week. “Not only has supply returned to the market, but so has discounting.”

Car prices have skyrocketed in recent years from a confluence of factors. For two years auto manufacturers and dealers took advantage of tight inventory due to supply problems to jack up car prices. That fueled inflation and triggered interest rate hikes, which together bumped up the overall cost of owning a car.

Meanwhile, more mass-market models sell for premium prices as carmakers stuff vehicles with expensive tech features and luxurious interiors. For their part, electric vehicles, which are gaining in popularity, tend to cost more than combustion cars because of their expensive lithium-ion batteries. 

Now that the semiconductor shortage is easing, manufacturer incentives are making a comeback and prices are starting to ebb, albeit slowly. Incentives made up 4.2% of the sticker price on a new car on average as of May, up from 2.4% last October, and are poised to keep climbing, according to consulting firm AlixPartners. 

The average price of a new car was $47,892 in May, down 1.3% from its peak in December, according to Edmunds. 

“We’re still in a pull market, but getting much more normalized over this period, which puts pressure on pricing, and of course pressure on manufacturer profits,” said Mark Wakefield, head of the automotive practice at AlixPartners’ office outside Detroit.

Costs continue to drive shoppers into the used market, said David Kelleher, owner of a Chrysler, Dodge, Jeep and Ram dealership in Philadelphia.

“I’ll have a customer come back on a three-year lease on a Ram truck — he leased the truck for $394 a month three years ago. I say, ‘Well, great news, you’re going to be at $687.’”

“That’s very difficult to do,” Kelleher said. “It’s led to a choppy market.”

Jeep, Ram and Nissan offered the highest incentives as a percentage of transaction price among a dozen brands in May, according to analysis by Cox Automotive. 

General Motors Co. likely increased market share in the first half of the year by outselling all of its peers, while Honda Motor Co. and Tesla Inc. also gained share, according to Cox. Toyota Motor Corp. and Stellantis NV lost market share, according to the forecast. Many of the largest car companies, including Toyota, will report second-quarter US sales numbers on Monday. 

Second Half Outlook

The need to replenish dealer lots will continue to drive sales in the second half of the year, though analysts are doubtful the industry can maintain the same momentum. Automakers have also vowed to keep a tighter rein on inventory to preserve pricing power.

Prior to the pandemic, annual US auto sales topped 17 million for five consecutive years, well above the 15 million forecast for 2023. 

Tesla, which slashed prices earlier this year to defend its position as the EV market leader, could also pressure automakers to swallow more of the cost of electric vehicles.

“There will be an easing of the current record levels of pricing and profitability as manufacturer incentives gradually increase,” said Thomas King, president of data and analytics at J.D. Power. “Nevertheless, this will be offset to some extent by an increase in overall sales volumes.” 

(Corrects to remove GM from companies that will report sales on Monday in 13th paragraph)

(Bloomberg) -- A strike at Geneva airport disrupted travel for thousands of passengers on Friday, fueling fresh concern that protests and labor shortages will cause another summer of travel chaos in Europe.

The strike, which initially grounded flights between 6:00 a.m. and 10 a.m. and was expected to affect about 8,000 passengers, was extended through the rest of Saturday, airport officials said. While Geneva reopened the runway, it did so mainly for intercontinental flights, with passengers still facing cancellations and delays. The airport’s website, which had become difficult to access in late morning, showed mostly canceled or delayed flights for the remainder of the day.

Airport personnel are protesting against a new remuneration policy approved Thursday by the board of directors. Airport authorities said they met with unions early today to make various proposals, which were turned down.

So far today, 69 flights were canceled and 17 managed to take off. Another 25 are currently preparing to take off and 15 have landed, a Geneva airport spokeswoman said, adding the she had no visibility on how much longer the protests might last. About 54,000 passengers were initially planned to pass through Geneva Airport on Saturday, another media representative said.

Geneva Airport, which borders on France, is a hub for international travel and an important base for airlines including EasyJet Plc, Air France-KLM and Deutsche Lufthansa AG-owned Swiss International. 

About 2,000 Swiss International passengers were affected by the initial four hours of strike action, the airline said. EasyJet initially canceled 20 flights and rescheduled another 14, a spokesman said. 

“Strikes have posed particular challenges to Swiss and its personnel this year,” Swiss International said. “Never before has our company had to cancel so many flights in various European countries as a result of strike action.”

Geneva and other European airports have been affected this year by a series of protests by French air traffic controllers. The latest one hit three smaller French airports on Thursday, which forced Ryanair Holdings Plc to cancel all flights at its main Paris-Beauvais airfield.

--With assistance from Siddharth Philip.

The National Health Service in England will get more than 300,000 staff under a new plan announced by the government on Friday to deal with a chronic shortage of doctors and nurses.

The publicly-funded NHS, which marks its 75th birthday on Wednesday, is facing an estimated workforce shortfall of 360,000 by 2037 due to an ageing population, a lack of domestically trained health workers and difficulties retaining existing staff.

The government’s long-term workforce plan would include reducing the time doctors spend in medical school and training more homegrown staff.

Prime Minister Rishi Sunak said: “On the 75th anniversary of our health service, this government is making the largest single expansion in NHS education and training in its history.

“In the coming years we will train twice the number of doctors and an extra 24,000 more nurses a year, helping to cut waiting lists and improve patient care.

“We will do more to retain our brilliant NHS staff and reform the way the health system works to ensure it is fit for the future,” he added.

NHS England currently has 112,000 vacancies as it struggles to fill the large number of workers leaving the service.

The NHS has seen unprecedented strikes over the last year, with staff complaining of being underpaid and overworked as they struggle to clear the backlog created during coronavirus lockdowns.

The government says the plan could mean an extra 60,000 doctors, 170,000 more nurses and 71,000 more health professionals in the NHS by 2037.

“The publication of our first-ever NHS long-term workforce plan now gives us a once-in-a-generation opportunity to put staffing on sustainable footing for the years to come,” said NHS England chief executive Amanda Pritchard.

“As we look to adapt to new and rising demand for health services globally, this long-term blueprint is the first step in a major and much-needed expansion of our workforce to ensure we have the staff we need to deliver for patients.”

Health is a devolved matter, with the governments in Scotland, Wales and Northern Ireland setting policy there. The UK government oversees health in England.

AFP

BY  Chinedu Eze

Aviation industry experts have lamented that international airlines are taking undue advantage of the exorbitant airfares and surge in passenger traffic in the Nigerian aviation sector to operate in the country.

The experts are of the view that international airlines are cashing out on Nigeria, thus making the country the most profitable destination in Africa.

The failure of foreign airlines to repatriate all their revenue from Nigeria and the devaluation of the naira with the merging of official and parallel exchange rates, have made airlines to charge high inventory fares, making the airlines record the highest profit per passenger on the Nigerian route.

According to the Nigerian Civil Aviation Authority (NCAA), 16 international airlines operate into Nigeria and in 2022, the total inbound and outbound passenger traffic was 3, 503, 692, but industry experts projected that international passenger traffic in 2023 would surpass that of the previous year.

According to them, the first quarter of 2023 data indicated that more people travelled out of the country than the same period last year.

THISDAY gathered that economy class ticket from Lagos to London and Lagos to Paris and most European destinations, which cost around N1.5 million a month ago, now cost an average of N1.9 million to N2.2million depending on the airline. 

For instance a Lagos to Paris economy class ticket on British Airways cost about $2,500, but using the N770 exchange rate to a dollar, it will amount to about N1.92million. Lagos to London economy class ticket on British Airways cost about $2,800 which amounts to about N2.15 million and Lagos to London economy class ticket on Qatar Airways cost around $2,900, which amounts to about N2.23 million.

Also, economy class ticket from Lagos to United States through connecting flights, which cost about N1.7 million a month ago is currently between N2.2 million and N2. 6 million and economy class ticket from Lagos to Atlanta, United States on Delta Air Lines cost about N2.4 million. The same ticket on Lufthansa and Qatar Airways, now cost around N2.6 million.

A Business class ticket from Lagos to London, Lagos to France and most European countries which cost about N2 million, now cost an average of N2.9 million to N3.4 million; while a Business class ticket from Lagos to London on Lufthansa Airline cost about N2.9 million and N3.4 million on Qatar Airways.

Also a Business class ticket from Lagos to the United States, which cost an average of N2.4 million a month ago now cost about N4.9 million on Qatar Airways and N6.9 million on Ethiopian airlines. Air Maroc appears to have the cheapest ticket on the route, costing about N2.4 million.

It is also observed that direct flights to destinations without connecting flights from airlines’ operating hubs cost more, but industry experts express surprise that instead of such high fares discouraging passengers from travelling, the airlines are witnessing surge and high load factor.

Former President of the National Association of Nigerian Travel Agencies (NANTA) and the Group Managing Director, Finchglow Holdings Limited, Mr. Bankole Bernard, told THISDAY that the high fares are not discouraging Nigerians from traveling because of three key factors.

Bernard said that other Africans do not have the same travelling culture as Nigerians, remarking that Kenya and Ghana, for example, have good quality schools so many of their students don’t travel overseas for education.

“Not travelling overseas for study can reduce the number of people who travel out of the country by 50 per cent. So, if Nigerians stay back from traveling overseas for studies it will significantly reduce passenger traffic. Also, Nigerians travel overseas for medical reasons and then we have a huge population, the biggest population not just in Africa but in the black race; so, you expect more people to travel from Nigeria,” Bernard said.

The former NANTA President also explained that it is the true that airfares from Nigeria is high but it is determined by supply and demand principles.

“Airlines are not charging high fares; it is demand that is pushing up the fares. We who sell the airlines ticket, we don’t do promotions because it is when you don’t have patronage that you do promotions; you don’t expect airlines to sell promo tickets when there is high demand,” he said.

Speaking in the same vein, travel expert and the organiser of Akwaaba African Travel Market, Ambassador Ikechi Uko, told THISDAY that every airline operating into Nigeria is charging maximum fare and the flights are still recording full load.

“International passenger traffic rose in the first quarter of 2023 compared to the same period last year, while there was slump in passenger traffic on domestic travel in the same period. One can explain the reduction in domestic passenger traffic. After the election many people were disappointed so, there was reduction in movement. Things just slowed down. When you look at the airfares in Africa you will notice that Abuja and Lagos are the highest for the same flight period. The exchange rate and the airlines’ trapped funds prompted international carriers to charge maximum fares,” he said.

The Managing Director of Flight and Logistics Solutions Limited, Amos Akpan, said that Nigeria has huge passenger traffic, noting that there are also high expatriate population in Nigeria that also travel, like the Indians, Lebanese, Chinese and others, noting that Indians alone can fill flights to India three times a week.

He added that unlike Ethiopia that operates a hub, where Ethiopia Airlines may bring one million passengers and only 200, 000 would be dropping in Ethiopia while 800, 000 would connect flights to other destinations, but Nigeria constitute about 80 per cent of the travellers from Nigeria, while expatriate constitute the remaining 20 per cent.

“So, Nigeria has high number of air travellers. We don’t have a hub like Ethiopia and Kenya; if we have a hub, the population of the travellers at the airport will double because those connecting flights from other parts of Africa, especially West and Central Africa will grow the travelling population to double what it is today,” Akpan said.

BY  Ifeoma Okeke-Korieocha and Chigozirim Enyinnia

As ticket prices to Europe and United States continue to rise, Nigerians who are keen on exploring tourist attractions for summer are beginning to look at African destinations that offer cheaper fares and ease of accessing visas.

By Abdullateef Aliyu

• Remain Notorious For Cancellations, Other Infractions
• What Regulations Say
• Operators Kick As NCAA Mulls Full Refund For Passengers
• Lawyers Speak

Air travellers are appalled that owners of commercial airlines are getting away with infractions like undue delays, cancellations, among others in Nigeria, at the detriment of their passengers without being punished, Daily Trust on Sunday reports.

Findings revealed that the situation is not the same in other countries in Europe and the Americas, where passengers are heavily compensated by airlines once there is delay or cancellation outside what aviation regulations stipulate.

In Nigeria, the problem of flight delays and cancellations has become a hydra-headed monster in the aviation industry.

Harrowing tales

Many passengers who spoke to Daily Trust on Sunday said the provisions on passengers' rights are being observed in breach. According to them, despite the provisions explicitly stipulated in the regulations, airlines usually delay flights without providing any form of succour.

Hajara Ismail, who works in Lagos, said she was delayed for more than eight hours by one of the airlines notorious for delays.

"I came to Abuja for weekend and booked with the airline to go back on Monday. It was an 8am flight and I was at the airport around 6:30am, but sadly, we were waiting until 9:30am when they announced that our flight had been delayed for two hours because of technical glitch.

"It was that so-called glitch that lingered until 4pm when we were evacuated. There was no serious apology and no refreshment. It is sad, Nigerians are being taken for a ride," she said.

Michael Miha said he missed a job interview because of the delay he suffered from Port Harcourt to Abuja.

"I am from Borno State and have a modest job in Port Harcourt, but I applied for another one in Abuja when a friend advised that I should go for it.

"Considering that the interview was scheduled for 10am, I booked a 7am flight and another one for 2:30pm to come back to Port Harcourt. To cut the story short, the one for Abuja delayed for 3 hours, and by the time we arrived, it took me over an hour from the airport to the venue. Everything was over and I missed the opportunity; and there was no compensation," he said.

Another passenger who shared an experience with our correspondent said, "I travelled from Lagos to Uyo recently and had an initial one hour delay due to weather. Finally ready to board at 0800, at the tarmac, all passengers were informed that no baggage would be loaded on the flight. Reason? The flight would operate with EMB-145. There was no fuel in Uyo, so they would lift fuel sufficient for Lagos-Uyo, plus next flight destination from Uyo.

"We were told that our bags would be sent to Abuja to connect the Abuja-Uyo flight, estimated to arrive in Uyo by 12:35. We arrived in Uyo at 0930. On arrival at Uyo, a fuel bowser came and refuelled the aircraft that brought us.

"What really was the reason for not carrying any of the passengers' baggage? Why would passengers wait for three hours plus in Uyo airport to receive their baggage from a flight they are not sure would bring the bags? Passengers are really suffering," she said.

Some of the passengers also blamed the regulatory authority for not being up and doing in addressing some of these challenges.

Otunba Ademola, a passenger said, "I had a bad experience with a Nigerian airline when it was still flying to London. Our flight was cancelled, and up till today, I have not been able to get a refund because the airline has stopped operating that route. I have made up my mind that I would not have anything to do with the airline again. Nigerian carriers need to wake up. They ought to have perfected this a long time ago."

Situation in other countries

This is, however, different from what is obtainable in developed countries, especially the Unites States and Europe, where passengers can claim huge amounts of money in compensation for delays.

For instance, in the US, there is a maximum of $700, roughly N525,000 at N750/$ (excluding accommodation and food costs, which airlines may have to cover) for delaying passengers.

But even short delays can incur penalties of $200 or more. Delayed flights can take off or land in any European Union (EU) nation, along with associated nations like Switzerland, Iceland and Norway (or the UK).

It was, however, gathered that for the compensation to be made, the airline must be at fault to some degree. Claims probably won't be accepted if extreme weather situations were to blame, which is classified as force majeure.

A Nigerian passenger told our correspondent how he was paid a compensation of $872, now N654,000 (including cost of feeding) by an airline in the US for delaying him for over three hours after the flight he was supposed to travel in was over-booked. He wondered why it is a different scenario in Nigeria.

"I was scheduled to travel from Washington to Pittsburgh and I was at the airport on time. I checked in my luggage and collected my boarding pass. However, when it was time for boarding, they discovered that there was no seat number on my boarding pass. They apologised and asked me to wait. After about 10 minutes, they discovered that my seat was given to a different passenger and the aircraft was fully booked.

"The man at the counter sincerely apologised and said it was a rare occurrence. He gave me another boarding pass to Pittsburgh en route New York, and at the same time, a cheque of $872 dollars as compensation. It was unbelievable. All these were completed in minutes," the passenger said.

Sunday Henry, who also suffered delay in the US, said he was compensated. "I was given money for the delay and refreshment while waiting for the next flight. It was awesome. It was very difficult to argue with the airliner because they treated you well and they genuinely apologised for the delay," he said.

"Here in Nigeria, passengers go through very traumatic experiences without any form of compensation. Very few airlines would bother to give you water and biscuits while waiting," he said.

Running battle

Over the years, there has been a running battle between airlines and passengers over undue delays and cancellation of flights.

This has resulted in passengers going haywire and attacking staff of airlines and equipment at the airport.

The major attack was in April last year when some passengers of Max Air at the Nnamdi Azikiwe International Airport, Abuja, went berserk over the delay of their flight, venting the anger on the airline staff while facilities of the airline were destroyed.

The same attack was recorded at the Murtala Muhammed Airport, Lagos as Lagos-Kano passengers also took on the airline's staff for delaying the flight.

The situation angered the Airline Operators of Nigeria (AON), which issued a strongly worded statement, saying, "The unruly passengers that went after Max Air and destroyed the computer reservation systems further exacerbated the problem for other passengers going to other destinations."

The president of the AON, Abdulmunaf Yunusa Sarina added, "Such acts are completely unacceptable."

The several attacks on airline passengers have, however, not solved the problem of flight delays in the country's aviation sector, Daily Trust on Sunday gathered.

A report compiled by some aviation professionals estimated that over $52.7 million was lost annually to flight delays.

In the analysis of the cost impact of flight delays released by the General Sales and Solution Management Limited (GSSM), an aviation consultancy firm, the experts estimated that $4.3million was lost monthly to arrive at the yearly loss of $52.7m or N24.2 billion

The report released by the Founding Partner/Executive Director of GSSM, Babatunde Adeniji, came a few days after the Nigerian Civil Aviation Authority (NCAA) released the 2022 Executive Summary of International and Domestic Flight operations, indicating massive flight delays by the domestic airlines.

The summary indicated that 11 domestic airlines operated 80,328 flights with 47,144 of the flights delayed between January and December 2022.

The 11 airlines included Aero Contractors, Arik, Azman, Dana Air, Overland, Air Peace, Max Air, Ibom Air, United Nigeria, Green Africa and Value Jet.

Adeniji, in his analysis, explained that "report card was filled in red, showing that we failed as an industry to even make the pass grade.

"Domestic airlines as a whole were only punctual for 41 per cent of operated flights, with Ibom Air and Green Africa and Value jet (new entrants) being the outliers among the 11 operators," he said.

We're not exclusively responsible - Operators

However, airline operators insist that flight delays were inevitable in the circumstances they operate.

According to them, apart from unexpected technical glitches to aircraft, there are also occasions of force majeure, which might cause flight delays. These include heavy downpour, the harmattan haze, which reduces visibility during aircraft landing and take-off.

On its part, the AON listed other causes of flight delays to include inadequate parking space for aircraft on the apron sometimes leading to ground accidents, inadequate screening and exit points at departure, inefficient passenger access and facilitation, natural and unforeseen circumstances, such as weather and catastrophic failures (bird strikes and component failures), and restrictions caused by sunset airports, among others.

Also listed among the causes is VIP movements, especially in Abuja, the seat of power, which have often triggered massive flight delays and cancellations in some instances.

Efforts to speak to some of the airlines individually were not successful as all of them said they didn't talk in isolation as they have an umbrella body.

When contacted, the vice president of AON, Mr Allen Onyema, told our correspondent that 95 per cent of causes of flight delays were outside the control of the airlines.

He alleged that this is why passengers should always exercise restraint when flights are delayed because they are mostly not caused by them.

He said, "I still say it and I stand by it. The AON also stands by it. Ninety five per cent of the delays Nigerians experience flying domestic operations are caused by things beyond their control.

"Let's start with when you have your aircraft on ground and you need to get a spare part. To clear with Customs might take you days or weeks. There is another one called end user certificate. My aircraft was on the ground sometimes for three months to get an end user certificate because some parts of the aircraft are classified as dangerous goods. I am not exaggerating and other airlines are facing the same thing. Things like this deplete your capacity.

"Secondly, you talk of airport infrastructure. I have told you what is happening in Abuja. Once your flight leaves on time from here to Abuja during that peak time in the morning, all the airlines are cramped into one small place, which has no conveyor belt and you are given two counters each when Air Peace alone is doing 28 to 30 flights out of Abuja alone, not to talk of other airlines.

"Again, most airports don't have night landing facilities. So what you do in order not to cancel flights is to sacrifice Lagos, Kano, Port Harcourt or Abuja, where you have night landing facilities. This is happening every day. Is that the fault of the airlines?

"You also have the issue of bird strike. Who is supposed to pursue the birds? Once you have a bird strike, where the aircraft is scheduled to go for that day would be affected," he said.

He decried that airlines and their staff had suffered undue attacks over the delay of flights, saying, "We need to be protected."

Existing regulations on flight delays, cancellations

The immediate past Minister of Aviation, Senator Hadi Sirika, once said the passengers' rights were protected in the existing civil aviation regulations.

According to him, on domestic flight delays beyond one hour, the carrier should provide refreshment and one telephone call, one text message or e-mail. They should send you an SMS or email, or call you to say, 'I am sorry, I am delaying for one hour.'

"For a delay of two hours and beyond, the carrier shall reimburse passengers the full volume of their tickets.

"Delay between 10pm and 4am, the carrier shall provide hotel accommodation, refreshment, meal, two free calls, SMS, email and transport to and from airport," Sirika said, noting that the same rules would also be applied to international flights.

Part 19.6 of the Nigeria Civil Aviation Regulations (Nig. CAR) 2015 as amended, which talks about domestic flights delays states, "When an operating air carrier reasonably expects a flight to be delayed beyond its scheduled time of departure, it shall provide the passengers with reason for the delay within 30 minutes after the scheduled departure time and the assistance specified thus: after two hours, refreshment as specified in section 19.10.1, and telephone calls, SMS and e-mails as specified in section 19.10.2 ; beyond three hours, reimbursement as specified in Section 19.9.1(i) ; and at a time beyond 10pm till 4am, or at a time when the airport is closed at the point of departure or final destination, the assistance specified in sections 19.10.1(iii)and 19.10.1(iv) (hotel accommodation and transport)

In case of cancellation of a flight, the passengers concerned shall, according to section 6 of the part: (i) Be offered assistance by the operating air carrier in accordance with sections 19.6 and; (ii) be offered assistance by the operating air carrier in accordance with sections19.9.1(i) and 19.9.2, as well as, in the event of re-routing when the reasonably expected time of departure of the new flight is at least the day after the departure as it was planned for the cancelled flight, the assistance specified in Sections 19.9.1(ii) and 19.9.1(iii) ; in respect of domestic flights, have the right to compensation by the operating air carrier in accordance with section 19.10 unless they are informed of the cancellation at least twenty-four hours before the scheduled time of departure."

Experts speak

An aviation analyst, Sheri Kyari, an engineer, said it would be a welcome development if the new regulations stipulated 100 per cent refund to passengers.

He said, "Definitely, this will help to wake up airlines to their responsibility to their customers. Secondly, it should make them see the necessity to go into code sharing, where they can check in passengers into other airlines rather than cancel flights and refuse to refund passengers their money for them to move on to other carriers. This will be great for passengers. In fact, not only refunding 100 per cent but with a 10 per cent of the air fare to fully compensate them.

"To be sure passengers are well compensated requires full implementation by the Authority and, may be, passengers having class actions in courts against erring airlines. When airlines find out they are losing a lot they will sit up. This can also lead to airlines reducing their flight schedules to manageable numbers because as it stands today, airlines try to operate very unrealistic schedules with fewer aircraft in the fleets."

The Director of Training and Research, Zenith Travels, Mr. Olumide Ohunayo said the regulations had been there but there has not been compliance and sanction.

"I think it has always been there. I just hope the airlines would see how they would comply with these regulations and also avoid this issue of cancellation by going into code-sharing with other airlines to lift their passengers and then work out remittance. So the rules have always been there to help passengers in terms of distress and flight cancellations and delays, but sanction for non-compliance has always been the issue," he said.

The general manager, Public Relations of the NCAA, Mr. Sam Adurogboye, in a chat with our correspondent said, "The NCAA position is that passengers are the reason we are in business.

"The NCAA will back an operator of a flight that is to be delayed on account of bad weather or have issues with fuelling or engine problems or any other snag. But passengers must be carried along. Anything short of that will not be allowed by the Authority. Violation of our regulations is viewed seriously in the NCAA and appropriate sanction is meted out accordingly."

'Why we're against new regulation'

Onyeama said the issues he raised were partly the reason airline operators expressed reservation over the new regulations being proposed by the Nigeria Civil Aviation Authority (NCAA), which stipulates 100 per cent refund for passengers who suffered flight cancellations.

Recall that the director-general of Civil Aviation (DGCA), Captain Musa Nuhu recently hinted about the proposal to ensure that air passengers would get 100 per cent instant refund anytime an airline cancels a flight.

He said, "We are currently reviewing our regulations to review what's done in the past that gives some days for refund if my flight is cancelled.

"What we have in the new regulation that will be signed into law very soon when it is all cleaned up is that if you cancel my flight you should put me on another flight or give me the option of getting a refund immediately so that I can make other plans," he said.

Passengers can sue airlines if ...

An Abuja-based lawyer, Chinelo Ogbazor Esq said airlines could be sued for damages if they breach the contract with their customers through cancellation of flights or inability to mitigate the loss incurred by a customer.

"If it is the act of God or acts or state beyond the control of the airlines, then parties will bear their respective costs," she said.

However, Kenechukwu Ifekwe said airlines may not be liable if they expressly stated in their terms and conditions what may happen in the course of the transaction.

"They are very smart and cover their failings using the terms and conditions. In Nigeria the refunds and lodgements are not made as of asking, it is very hard" he said.

Passengers can sue airlines if ...

An Abuja-based lawyer, Chinelo Ogbazor said airlines could be sued for damages if they breach the contract with their customers through cancellation of flights or inability to mitigate the loss incurred by a customer.

"If it is the act of God or acts or state beyond the control of the airlines, then parties will bear their respective costs," she said.

However, Kenechukwu Ifekwe said airlines may not be liable if they expressly stated in their terms and conditions what may happen in the course of the transaction.

"They are very smart and cover their failings using the terms and conditions. In Nigeria the refunds and lodgements are not made as of asking, it is very hard," he said.

• Airlines’ $812.2 million remains trapped in Nigeria

Nigerians traveling abroad are now  struggling to meet up with rising air fares as the fluctuation of foreign exchange bites the air  travel sector.

Many of the  passengers have now resorted to booking and paying  for  their oversea trips in  neighbouring countries including Ghana , Benin and Republic of Togo where lower fares are obtainable.

An investigation by The Nation showed that fares on international routes from Nigeria have been on the rise over the last few months and especially so since the introduction of the single forex market.

Most hit by the development are flights to  Europe , Middle East  and the  United States.

Passenger traffic,which usually peaks on the approach of summer,has  dipped considerably owing to the rising air fares.

The spike in fares is one of the direct results of the depreciation of the naira brought about by the cancellation of the parallel forex market.

International  air fares are  often denominated in the US Dollars.

A passenger who does not want to be named said the situation has forced many intending travellers to weigh their options before embarking on any trip.

Next Stay

The global airlines’ body   International Air Transport Association (IATA) said, last week,  that the increase in fares was inevitable since they are  denominated in dollars and  converted into the local currency, for sale in the Nigerian market.

 These conversions, IATA said,   use the official prevailing exchange rate provided by the country’s  financial system.

These conversions, IATA said,   use the official prevailing exchange rate provided by the country’s  financial system.

” IATA simply applies the spot rate at which the Central Bank of Nigeria sells USD through banks to the market, at its fortnightly retail foreign exchange auctions,” it said.

“The rate is not static. If the rate at which the CBN sells US Dollars  goes up, the exchange rate applied to airfares will follow and vice versa.”

Under the new dispensation, a Lagos / London return trip  now attracts an average of N1.4million,according to the  booking inventory by a travel management company.

A July 2,2023 booking  for direct flight  costs N1.2 million for a direct flight.

 A direct / transit / connecting flight on Royal Dutch KLM Airlines on the same day goes  for N1.3 million.

On Air France, booking for  the same date for direct flight costs  N1.4 million . Transit / connecting flight on the Lagos / London route is going for N3.4 million.

On Lufthansa German Airlines, booking for the  same date on direct routing is going for N1.5 million. Connecting / transit flights are going  for  the same amount.

On Ethiopian Airlines, booking for direct flights on the same destination is going for N1.5 million.

Connecting / transit flights on the same destination is going for N1.6 million.

Booking options to Dubai,UAE, a favourite destination for  many Nigerian travellers, offer intriguing rates.

Direct booking on Ethiopian Airlines for July 2, 2023 is N1.2 million while transit / connecting flights for  the same routes for July 2, 2023 has on offer a fare structure of N1.6 million.

On Qatar Airways, booking for the  same travel date is offering a fare regime of N1.8 million for direct routing. Connecting/ transit flights for the  same date present same fare.

For travels to continental United States- Lagos / New York for July 2, 2023 the fare offering on Royal Air Maroc is going for N1.6 million , Ethiopian Airlines N1.9 million , Air France N2.5 million , Delta Airlines N2.5 million and Kenya Airways N2.7 million; which are on direct routing regime.

Foreign carriers  say they currently have over $812.2 million from ticket sales trapped in Nigeria.

Nigeria is  ahead of Bangladesh with $214.1 million , Algeria with $196.3 million , Pakistan with $188.2 million and Lebanon trailing fifth with $141.2 million.

IATA’s Director General and Chief Executive Officer, Willie Walsh, said  at the recent  Annual General Meeting & World Transport Summit of the world’s airline body in Istanbul, Turkey, that rapidly rising levels of blocked funds constituted  a threat to airline connectivity in the affected markets.

The industry’s blocked funds , Walsh said,  increased by 47 percent  to $2.27 billion in April 2023 from $1.55 billion in April 2022.

 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.”

IATA urged governments to abide by international agreements and treaty obligations to enable airlines to repatriate these funds arising from the sale of tickets, cargo space, and other activities.

Speaking on the development, an industry analyst and  Head,  Strategy, Zenith Travels, Mr Olumide Ohunayo, said international fares out of Nigeria were on the rise because of Nigerian  carriers’ inability  to compete on international routes.

According to him, foreign carriers, having suffered from the trapped funds and based on the international trade agreement to remit revenue at the time of sales of tickets have lost money to  the new rate of exchange.

He said : ” Except there is compliance with that condition, higher fares will continue on Nigerian routes.The consequence of this is that travel agencies are losing patronage, which could get worse, triggering loss of jobs. Intriguingly, many passengers are running to neighbouring countries , or friends and relatives abroad who could buy tickets for them directly with dollars or other foreign currencies on the website and send for their people to travel.

“These are the factors that affect passenger traffic in and out of Nigeria due to high naira rates for the air tickets. If you have dollars, it is cheaper to procure tickets than if you  are looking at purchasing it in naira. Majority of Nigerians would have to use naira, this presents a downside to the development. The Nigerian market is peculiar , because of our penchant for travel and inability to analyse the market and reverse it to our advantage.

 ” Significantly, travel out of the country from the Lagos and Abuja axis is huge for first class and business class , which is building up irrespective of the fares.

” The only way we could bring this down , given that these foreign carriers are the only ones dominant on the routes , will trigger demand and supply disruptions.

” The lower demand for travel now is only on  economy fares and private travel .”

On the way out of the crisis,Ohunayo canvassed increased capacity on international routes  for Nigerian airlines  either as flag carriers or national carriers must join the fray for partnership . “It is only at such points or conditions that air fares could witness some significant reduction.”

(Bloomberg) -- European airline passengers risk another summer of travel chaos as destinations including Budapest, Marseille and Athens face an overload of air traffic during the peak travel season.

The warning was issued by Eurocontrol, the organization overseeing air space in Europe. According to a European Network Operations Plan published Friday, air traffic reached pre-pandemic levels last week, putting additional strain on the system as airlines and ground services still grapple with staffing shortages and strikes flaring up across the region. 

“We have emphasized that the aviation summer could be very challenging, especially if higher traffic levels coincide with unforeseen events like bad weather or industrial action that hamper the smooth functioning of air traffic operations,” a spokesperson for Eurocontrol said.

There were more than 34,000 flights last week on Friday, and about 33,000 flights are set go ahead per day between July and August, Eurocontrol wrote in its plan. Although airports are predicting smoother operations, staffing issues could put pressure on hubs, especially if there are network disruptions, Eurocontrol said.

Airline executives have spoken out about the possibility of disruptions this summer as demand soars. Jozsef Varadi, the chief executive officer of Wizz Air Holdings Plc, previously said that airline operations won’t be perfect this summer following a chaotic travel season last year, but he expected the industry to be more robust and resilient to tackle any problems.

Meanwhile, Ryanair Holdings Plc CEO Michael O’Leary has lamented flight cancellations because of strikes by air traffic controllers in France. The Irish budget airline scrapped 130 flights last week and 400 flights in early June because of the protests.

This summer is set to experience an additional challenge because the Ukraine war has limited the amount of available airspace, Raúl Medina, Eurocontrol’s director-general, said during an Airports Council International meeting with delegates in Barcelona last week, according to The Times. 

MONTREAL — Air Canada delayed or cancelled nearly 2,000 flights over the Canada Day long weekend in what one expert said could be a taste of more troubles ahead for passengers.

Roughly half of all trips by the country's biggest airline — including its lower-cost Air Canada Rouge and regional partner Jazz Aviation — were disrupted Saturday through Monday, according to figures from tracking service FlightAware.

The 1,965 flight delays and cancellations stand in contrast to figures from some other Canadian carriers such as WestJet, Air Transat and Flair Airlines, which registered lower flight disruption levels.

They also mark an uptick from the previous weekend, despite an unplanned shortage of air traffic controllers at Nav Canada that snarled the travel plans of thousands during that period.

Posts and photos of snaking lines and bulging terminals at airports in Toronto and Montreal plastered social media over the past few days, as passengers vented their frustration about late takeoffs and customer service in a throwback to scenes of post-pandemic airport chaos a year ago.

“It is a sea of humanity and mayhem at the Montreal airport this afternoon," passenger Andrew Holland said in a Twitter post Monday evening.

"Stranded bags and delayed flights and huge lineup for taxis. Makes the experience at Pearson in Toronto last week feel like a picnic."

Air Canada pointed out that the air travel sector is now in the throes of its summer peak, with 140,000-plus customers boarding the airline's planes daily.

"Our top priority is to ensure everyone travels safely, even if it requires extra time," spokesman Peter Fitzpatrick said in an email.

Bloated flight schedules and fewer spare planes play a role in travel turmoil, said John Gradek, who teaches at McGill University's aviation management program, adding that disruption figures are trending upward.

"There's a lot of people flying, planes are full, and there's there's very little operational reliability or operational backup," Gradek said.

"If an airplane craps out, for whatever reason — mechanical things do happen — you've got to fix the airplane before you go. So you automatically take these these monstrous delays or you cancel."

Air Canada is running a more "tightly wound" schedule after the revenue collapse prompted by COVID-19 travel restrictions, Gradek added, with the company operating at roughly 90 per cent of its pre-pandemic flight capacity.

The carrier echoed that message, pointing out how it may take longer to recover from a wrench in the gears of any system operating at full tilt.

"For example, when thunderstorms halt our operation, as we saw over the recent weekend in the U.S. northeast, we may require more time than scheduled to get aircraft into position for their next flights," Fitzpatrick said.

He added that Air Canada is fully staffed, with more employees than in the summer of 2019, despite running fewer flights.

This report by The Canadian Press was first published July 4, 2023.

Companies in this story: (TSX:AC)

Christopher Reynolds, The Canadian Press

By Damilola Aina

The Bank of America has said the Monetary Policy Committee of the Central Bank may need to increase interest rates by at least 700 basis points before the end of the year to curb inflation.

In an interview with Bloomberg on Monday, the bank’s sub-Saharan Africa Economist, Tatonga Rusike, said the hike was necessary to tackle soaring inflation occasioned by the fuel subsidy removal and unification of foreign exchange.

Rusike explained that at the current trend, inflation may quicken to 30 per cent by the end of the year from 22.4 per cent in May, noting that the nation’s apex bank may need to push up the rates.

He further warned that if this decision was not taken, foreign investors might exercise caution before investing in the country.

“Inflation may quicken to 30% by the end of the year from 22.4% in May and that will require a monetary policy response from the central bank – effectively, interest-rate hikes by at least 700 basis points.

“If the negative real interest rate is not reversing, then it is less likely to see foreign inflows coming into the country,” Rusike said adding that “it is less likely they (CBN) will do such level of increases,” he said.

The PUNCH reports that the CBN, in record-breaking moves has been increasing the country’s interest rates since last year.

At its last Monetary Policy Committee meeting held in May 2023, the benchmark interest rate was further pushed forward by 0.5 per cent to 18.50 per cent from 18.00 per cent in March.

The raise has however not slowed Nigeria’s soaring inflation which hit 22.41 per cent in May 2023 compared with 22.22 per cent in April 2023.

In its report last month, the National Bureau of Statistics attributed the increase in the average prices of goods and services in the month under review to the 24.82 per cent jump in the food inflation rate.