AUGUST 09, 2023

BY  Ifeoma Okeke-Korieocha

Following the recently introduced civil aviation regulation, requiring a minimum of six aircraft for start-ups and existing airlines, local carriers may be seen entering partnerships, mergers and engaging in acquisitions in a bid to remain in the market.

Before now, prospective airlines in Nigeria were only required to get two aircraft to commence scheduled operations but with regular flight delays and cancellations and sometimes shut down of airline operations as a result of aircraft shortage, NCAA has had to review this regulation, demanding that prospective airlines must now present a minimum of six aircraft before they are allowed start scheduled operations.

While International Civil Aviation Organization (ICAO) regulation do not place any minimum aircraft requirement for airline to start operation, the Nigeria Civil Aviation Authority (NCAA) has said he new regulations has become necessary to safeguard the viability and stability of incoming airlines within the aviation sector.

Olumide Ohunayo industry analyst and Director, Research, Zenith Travels said the new regulations would make airlines restrategise and enter partnerships and aquisitions agreements in a bid to survive.

“There have been some people who have objected to the new regulation but I don’t have any objection to it. We need to grow capacity, we need to have strong airlines. The regular flight delays and cancellations has to do with aircraft availability. Some say there are airlines in the world that started as one airline and have become big airlines and this I agree.

“But after looking at our recurrent misteps and failures, if we need this regulation to build strong airlines from beginning, then so be it,” Ohunayo said.

He however suggested that NCAA should look at the possibility of creating another cadre of airlines that would have for instance, not more than one hundred seats comprising of maybe 13 to 20 seater aircraft.

He explained that as these small airlines grow and are able to do certain number of seats, then the full schedule operators law would be applied on them.

“This group may not need up to six aircraft. You can ask them to have just two aircraft or three and they will be going to the short routes and airports without much traffic. These are the aircraft that will now develop into the bigger ones or merge or go into partnership with one of the bigger ones.

“Those still operating will still remain but along the line, they may start discussing partnerships and integration. Most airlines don’t want to hear the word ‘mergers’ but there is a need to begin to build airlines with capacity and airlines that go beyond single ownership.

“We are talking about Bilateral Air Service Agreement (BASA) but we cannot to have airlines owned by one person being pushed as flag carrier. People will definitely object to it. Airline ownership must go beyond one person. We must find a way to get others onboard, so people will now see them as Nigerian airline and not airline owned by one man,” Ohunayo said.

Musa Nuhu, the Director-General of the Nigeria Civil Aviation Authority, said the acquisition of six airplanes is not restricted to new entrants, he stated that the old ones also have a period by which they have to comply.

He explained that if airlines have three aircraft for instance and lose one out of it, it has become a problem to meet up with their operations and then they start to have issues with flight delays, cancellations, and eventual suspension of operations.

“The number of aircraft you will have will depend on the kind of operations you want to do. You can imagine somebody who comes in with just one or two aircraft and one of the aircraft goes out of business, and sells tickets to the passengers, think of what will happen. For you to have six aircraft, it shows you have very strong financial backgrounds of running an airline.”

“If everybody has one or two aircraft, we will keep having this recurring problem. We have to avoid that. People will criticize, but every country is different. We have to look at our own peculiar history and try to come up with solutions, but regulations are not cast in stone. If the situation changes, the regulation would be reviewed accordingly. Whenever it is necessary, we don’t have to wait for five years before we make amendments,” he added.

In the last two years, several airlines have had to temporarily suspend operations as a result of aircraft shortage, as their all aircraft had to go on scheduled maintenance at the same time. These airlines include Aero Contractors, Dana Air and Azman Air, thereby leaving several passengers stranded. Some of these airlines have however resumed operations after the arrival of their aircraft from maintenance facilities.

However, barley one month after it resumed operations, Azman Air has again shut down operations as a result of shortage of aircraft.

The management in a memo, signed by Magaji Misau, its Human Resource Manager, dated August 3 and titled: ‘PLACEMENT OF LEAVE WITHOUT PAY,” asked all of staff to proceed on leave with an exception of an under listed eight names.

The letter read in part: “As you are aware, our domestic operations has been put on hold for a while due to the conveyance of our aircraft for C-checks and the MROs has given a longer time of completion.

“In view of the above, the management directed to write and communicate its decision that all staff have been placed on leave without pay with effect from August 1, 2023.”

For some other airlines like Medview and First Nation, these airlines have been unable to resume flight operations afterwards.

John Ojikutu, security expert and former military commandant at the Murtala Muhammed International Airport, Lagos said the six aircraft requirement has been long overdue.

“In my Book Troubled Skyline, I have recommended five aircraft and three domestic routes. This will reduce the unnecessary delays and cancellations if only partnerships, interlining or code sharing are incorporated into the Domestic Operations by the Airline Operators of Nigeria (AON). Unfortunately, the ego practices among our domestic airlines operators can’t create growth in the commercial aviation industry in Nigeria.

“We have too many in the airport of Lagos same manner you have danfos, korope, maruwa and Okada on our roads competing for space. What one BRT will take in one sweep and one space is what seven danfos would carry in three BRT spaces on the roads. Imagine how many aircraft loading at Murtala Muhammed Airport (MMA) for Abuja in the morning and how many of them have optimum number of passengers for take off at schedule time?,” Ojikutu said.

He said it is not enough to limit the number to six, but also necessary to restrict airlines to operating bases instead of them all concentrating on MMA.

“In the past, OKADA was operating from Benin, Kabo from Kano, Horco later Harka from Kaduna, etc. ADC that was to operate from Calabar was operating from Lagos. These regulations are necessary to reduce conflicts among the operators and even with the services providers,” he added.

Ibrahim Mshelia, owner of West Link Airlines Nigeria and Mish Aviation Flying School, however described the new regulation as an unprogressive one , adding the NCAA is supposed to be thinking of how things will get easier for airlines to operate and not make it difficult for airlines.

Mshelia explained that acquisition of airplanes can either be outright purchase or lease which can either be dry lease or wet lease but for schedule operations, the law requires airlines bring wet lease aircraft.

“Wet lease means the airplane has to be registered in Nigeria so that the NCAA can oversight the operations for safety reasons, which is the ideal thing and is correct. However, the six aircraft requirement is a law that stall our growth. If it is NCAA that brought the idea of minimum of six aircraft, then NCAA has failed the system.

“I know I told people in NCAA that this will be counter productive. We have standard and recommended practices of ICAO which makes it easy for airlines to operate. General aviation means stepping down the regulation within the minimum safety and allow people to learn the trade and advance to the next stage.

“But in Nigeria we raise the bar trying to be the best but we are stalling the growth of airlines. Nigeria has higher aircraft put together than most African countrues. ICAO allows you start scheduled operations with one aircraft and anywhere in the world, there is nothing wrong with this. I called Ghana Civil Aviation and asked how many aircraft I needed to start operations in Ghana and I was told minimum of one. This makes the airline overhead cost lower to start and grow the operations,” he explained.

He said African countries work in synergy so the laws should be similar.

He suggested that instead of placing entry requirements based on aircraft number, NCAA can demand that prospective airlines show how they can start, make profit over time and operate safely, so they don’t cut corners.

He said If anyone flaunts the law, then he should be shut down.

AUGUST 09, 2023

Air Peace is set to commence direct flight operations from Nigeria to Houston, the United States, and London before the end of the year. In furtherance to the commitment towards dominating the West African sub-region, the airline is also eyeing operations to Cotonou, Benin Republic, Abidjan, Cote d’Ivoire, Congo, Kinshasa and Malabo in Equatorial Guinea.

However, while announcing the kick-off operation during the reception to honour Nigeria sports heroes of Nigeria’s 1976 Olympics Games and 1980 AFCON National football teams in Lagos, the Managing Director and Chief Executive Officer, Air Peace, Allen Onyema, stated that Houston and London flights will commence in October 2023.

According to Onyema, the Ministry of Aviation recently contacted him on the Houston and London flights after a meeting held with the government and officials of the aviation authorities.

“And now London is beckoning before October or there about. Just recently the minister of Aviation contacted me in Houston just about a few days ago about the meeting they held in Houston and they are now calling on Air Peace to do that route, both America and wherever we are flying.

“We can do more legacy routes like Atlanta, New York when international aero politics permits. We are very ready and these routes are coming very soon.

“Other African and international routes will follow subsequently. We can fly anywhere in the world.
“We are currently flying to Guangzhou China, Johannesburg, Mumbai India, Jeddah, and Tel Aviv,” Onyema added.

AUGUST 10, 2023

(Bloomberg) -- Virgin Galactic Holdings Inc. is poised to launch its first private space tourists on Thursday morning, the company’s second commercial spaceflight and a long-awaited milestone in founder Richard Branson’s quest to build a “spaceline for Earth.”

The suborbital joyride from a New Mexico spaceport caps nearly two decades of development work and allows Virgin Galactic to finally begin clearing a backlog of roughly 800 ticket holders who have been waiting for rides to space. Virgin Galactic is competing against Jeff Bezos’ Blue Origin to sell trips to thrill-seekers looking to shed Earth’s gravity for a few minutes, the driving reason the company was first created.

The passengers include 80-year-old Jon Goodwin, a British former Olympian who has Parkinson’s Disease, as well as Keisha Schahaff and Anastatia Mayers, a mother-daughter pair from the Caribbean who won their seats through a charity drawing. They’ll be joined by two pilots and a Virgin Galactic support astronaut. 

Virgin Galactic’s shares rose 1.2% to $3.42 as of 9:33 a.m. in New York. The stock was down nearly 3% this year through Wednesday and remains well below the highs of more than $55 in 2021. It was publicly listed through a reverse merger with a special purpose acquisition company, or SPAC, in 2019.

A webcast of the flight is set to begin at 11 a.m. New York time.

The flight comes a little more than a month after Virgin Galactic finally kicked off commercial spaceflight operations. That first flight, Galactic 01, was strictly a research mission. It included a trio of researchers for the Italian Air Force, who tended to scientific payloads designed to take advantage of the microgravity environment of space.

Read more: The Virgin Galactic Crash and the Risks of Space Tourism

Founded in 2004, Virgin Galactic originally promised to begin flying passengers as early as 2007. In those early days, tickets were sold for $200,000 and then upped to $250,000 while the company experienced delays. In 2014, a Virgin Galactic spaceplane crashed during a test flight, killing one test pilot and seriously injuring another, prompting the company to suspend ticket sales.

Virgin Galactic has experienced successes and failures since then. In 2018, the company reached space for the first time, and it made headlines in 2021 when it flew Branson to space. But after that flight, Virgin Galactic opted to stand down from space missions for nearly two years as it upgraded its vehicle fleet. It reopened ticket sales in 2022, that time for $450,000 a seat.

Loss Leader

Now, the company has a daunting backlog of customers to get through. But even as these passengers start to finally see space, Virgin Galactic says it will be a few years before it sees a profit from its missions.

The primary vehicle the company is flying at the moment is VSS Unity, a spaceplane that was unveiled back in 2016. While Unity will be used to perform monthly space trips, Virgin Galactic is focused on developing a new fleet of space vehicles called the Delta class. These ships, expected to enter operation as late as 2026, will be optimized for easier refurbishment and faster turnarounds between flights, allowing a higher frequency of trips each year.

“There’s a little bit of a loss leader here with Unity,” Mike Moses, president of spaceline missions and safety, said in a June interview. “But it’s important to demonstrate not only that we can do it, but to learn all the lessons to apply.”

Virgin Galactic doesn’t anticipate seeing meaningful revenue for years. The company projects only bringing in roughly $1 million in revenue in each of the last two quarters of the year. That revenue could be slightly higher if a research flight is thrown into the mix, as seats for those missions run around $600,000, the company said. 

Virgin Galactic Chief Executive Officer Michael Colglazier told Bloomberg News in June he is confident Virgin Galactic will be able to turn a profit if it can fly Delta on weekly trips to the edge of space.  

Though he acknowledges suborbital space tourism will be a “capacity-constrained business” for some time, he hopes that as more private astronauts fly, they will inspire more customers to sign up.

“We need to normalize this industry,” Colglazier said. “It’s not usual for your neighbor to go to space. But as we bring people through, that will become normalized.”

(Updates share trading in fourth paragraph)

AUGUST 12, 2023

(Bloomberg) -- Air Canada said it hedged about 30% of its jet fuel costs as it re-enters the oil derivatives market after about four years. 

The company hedged about 30% of its anticipated purchases of jet fuel for the third quarter using call options that have a fair value of $19 million, according to an earnings release.

The move marks a return to hedging for Air Canada, which, until 2019, routinely protected its fuel purchases. Airlines have been burned repeatedly in the past from their hedging practices, most recently during the pandemic, when several firms found themselves overprotected as passengers stayed home. But as oil prices have surged over the past year and travel demand boomed, those with coverage have reaped massive windfalls.  

The decision to hedge was opportunistic, with fuel prices having stabilized at lower levels than seen previously in the year, the company said on an earnings call Friday. Still, Air Canada is unlikely to hedge regularly going forward, the company said. 

AUGUST 12, 2023

BYDR. OMAR MEMON

The airline suspended all domestic services on April 18.

 Azman Air has suspended its commercial services and put all employees on mandatory leave without pay.

 The airline previously suspended operations in March 2021 to uphold aviation regulations and ensure flight safety.

 The airline is currently facing challenges in maintaining its Boeing 737 fleet, with all aircraft undergoing maintenance and C-Checks.

Nigerian-based domestic airline Azman Air has suspended its commercial services and sent all its staff on compulsory leave without pay. The mandatory leave for its personnel resulted from its end of Hajj operations and the unavailability of its Boeing 737 aircraft. The circular signed by the Human Resources Manager at the airline state that only eight senior staff members are exempt from unpaid leave.

Another suspension of services

It is not the first time that the airline has suspended its commercial operations. In March 2021, the airline suspended its flight services to all destinations in Nigeria. The airline needed to upkeep the aviation regulations in its operations and the safety of flights.

According to the Nigerian Civil Aviation Authority (NCAA), the suspension allows regulators to audit the carrier to determine the cause of previous incidents and recommend solutions.

Presently, the airline is struggling with the maintenance of its Boeing 737 fleet. The airline operates a fleet of five Boeing 737s (two -300s and three -500s) and an Airbus A340-600. All of the Boeing 737 fleet is currently out of service for C-Checks at different MRO locations.

AUGUST 13, 2023

Looking to splurge on your next vacation?

The travel website FloridaPanhandle.com analyzed costs in 100 popular vacation spots, looking into average prices for accommodations, transportation, food and attractions.

Here are 10 destinations that certainly call for big budgets.

According to the analysis, the most expensive vacation destinations, excluding flight costs, are:

1. Gustavia, St. Barts
2. Gstaad, Switzerland
3. Aspen, Colorado
4. Park City, Utah
5. Maui, Hawaii
6. London, England
7. Cocoa Island, Maldives
8. Maun, Botswana
9. Grand Cayman, Cayman Islands
10. Monte Carlo, Monaco

The 10 most expensive vacation destinations around the globe. Source: CNBC

The list was dominated by islands and ritzy ski towns, though the draw of eco-tourism safaris in Botswana and Europe’s financial capital, London, rounded out the ranking.

Where hotels average $1,000 per night

The Caribbean island of St. Barts is the most expensive vacation destination in the world, largely because of its high accommodation costs, which average $1,770 per night, according to the analysis.

Average hotel rates in Switzerland’s Gstaad (No. 2) are $1,360, according to the research. The town in the Swiss Alps also has the highest average food costs on the list, at $177 per day.

Accommodations at the third priciest spot — Aspen, Colorado — average $1,385 for one person, but a family of four can expect to pay $2,274, according to the analysis.

A street in downtown Aspen, Colorado. Nik Wheeler | Corbis Historical | Getty Images

To find those prices, FloridaPanhandle.com researched average rates for four- and five-star hotels for stays during Christmas (Dec. 21-27) and the spring (May 19-25), but did not include taxes.

Attractions: from $0 to $333 per day

To estimate the price of activities, FloridaPanhandle.com calculated the average cost for each location’s three most-reviewed attractions on TripAdvisor.

The ski town of Park City, Utah, averaged $333 for daily attractions — the highest on the list.

Attractions in Maun, Botswana, Africa’s lone destination on the list, averaged more than $100 per day for activities like a one-day visit to the Okavango Delta.

Despite having higher overall average costs, St. Barts and the Maldives’ attractions were valued at $0. Vacationers may have to pay top dollar for hotels in those locations, but their beaches are free.

Monaco, Monte Carlo. Ostill | Istock | Getty Images

Monte Carlo had one of the lowest average rates for attractions on the list, a surprising result for a vibrant gambling hot spot.

While “Monte Carlo is known for its casinos, it is also not the most popular thing to do in town,” said a representative from FloridaPanhandle.com.

According to the company, the three most popular attractions in Monte Carlo are the Oceanographic Museum of Monaco, an outdoor area called Casino Square, and the Casino of Monte Carlo, which has an entrance fee of 18 euros ($20).

Gambling losses, however, are not included in Monte Carlo’s average attraction costs.

AUGUST 14, 2023

By Obas Esiedesa

Oil marketers Monday in Abuja urged the Federal Government to act urgently to halt the consistent slide in the value of the Naira against the dollar as it has significantly impacted on the pump price of petrol.

The President of the Natural Oil and Gas Suppliers Association of Nigeria, NOGASA, Mr. Benneth Korie told journalists that the pump price would rise in the coming days due to the significant fall in the value of the Naira to the dollar.

Mr. Korie disclosed that petrol pump price may increase next week to reflect the market exchange rate of the Naira to the dollar, stressing that the government needs to streamline the currency trading market.

According to him, “Today was we speak, diesel is going for N920/950 per litre, before now, it was N600 plus, and then the government introduced tax on the product. We will suggest that the government should take action on the dollar issue otherwise diesel and petrol and other petroleum products will go up more than what you are seeing today.

“The only way out is (for the government) to take serious action by calling the BDC (bureau de change) and the bank managing directors to sit down with the Central Bank of Nigeria, CBN, and come out with one uniform price for the Naira against the dollar. Leaving it freely to be determined by the market will spell doom for the country. The way it is going, it will destroy a lot of things for us”.

The marketers also insisted that fixing the moribund refineries has become an urgent national issue, saying that getting the refineries back in operation will stabilize petrol pump prices and relieve the pressure on the local currency.

“We have Nigerian engineers and they should be saddled with fixing the refineries. I believe Nigerian engineers can fix the problems and with the right machineries. Every time, billions of Naira is spent on repairing the refineries by foreigners, now see where it has gotten us. One of the factors responsible for the problem we are facing today is that the government removed subsidies before fixing the refineries”.

The marketers also tasked the government on the need to fix the road networks in the country, stressing that it was having a heavy toll on the cost operations in the downstream sector.

“The route from Warri to Abuja is a no-go area. Our trucks are at a standstill, and our drivers are being kidnapped and killed. Our trucks are vandalized and the products are taken out of them and this is a waste of money. We had this same problem last year in the same place yet nothing has been done”, he added.

The NOGASA President lamented that the business environment has become stifling with several filling stations shutting down due to high cost of operations.

“If you go round, you’ll see a lot of filling stations are closing. If you were trading with N10 million before, forget about it. Someone who was trading with N100 million, you could buy one million litre of petrol in a month to sell but now, with N100 million you can only buy 150,000 litres in a month. You’ll also incur the same expenses when selling one million liters in a month”.

AUGUST 15, 2023

The prevailing foreign exchange crunch seems to be taking its toils on Nigerian students in diaspora as three students were removed from the enrollment list at Swansea University, in the United Kingdom (UK), for paying fees late.

The Nigerian trio of Omolade Olaitan, Emmanuel Okohoboh, and Paulette Ojogun, paid their school fees a few hours later than expected, and have been asked by the university authority to go back to their country or defy the admission for making payment later than the stipulated time.

According to the students, “They have explained to the school that their school fees came late as a result of the cash crunch that hit Nigeria earlier in 2023.

Swansea University, UK, has, however, turned deaf ears and held on to the N3.8 million (4000 pounds) school fees while asking the students to pack their bags and go home.”

Olaitan, one of the students, explained that the deadline for the payment of her fees was March 27, 2023, but that made her payment on March 29.

“On March 29, I got an email from income tuition. They confirmed my payment and they told me that because the payment didn’t come in before the deadline, they can no longer allow me to enrol and that I should pack my bags and go back to my home country,” she said.

Okohoboh, another affected student, who got admission to start a master’s degree in Business Management, said that he had to sell two parcels of land to raise his fee only for the university to ask him to go back home.

“They are not fair, they are not compassionate, they are showing no signs of empathy.

I had to sell my dad’s land and a piece of my own personal land to get the resources to come to Swansea University to study. Coming here and going through this situation has been mentally draining and frustrating for me,” he said.

While Ojogun, another student who enrolled for a marketing management degree, also paid her fees after the deadline.

“I am happy that I am here, I am happy that I am studying, so why would you take that away from me because my school fees came in late? I’ve explained everything to them, I sent emails, and they still would not give me a listening ear,” she cried.

The Swansea University have expressed sadness over the ugly situation, but insist it cannot go against the UKV1 rules.

However, the Central Bank of Nigeria (CBN) has said it does not believe that the current naira freefall is caused by the market forces. Rather it says it is caused by speculators.

Folashodun Shonubi, the acting CBN governor said this in a broadcast, Monday, August 14, 2023, adding that the government is ready to take action to save the naira.

“I do not believe that the changes going on in the parallel market are driven by pure economics demand and supply, but I am topped by speculative demand by people,” he said.

AUGUST 16, 2023

BY  Titi Omobude

Nigeria’s tottering power sector, which has seen electricity generation fall to below the worst levels under the Muhammadu Buhari administration, now faces an acute cash shortage, which experts say could lead to its imminent collapse and with it a new front of pressure against the government of President Bola Tinubu.

Electricity supplied to the national grid is today as low as 3,700 megawatts (MW) and if the export power is excluded, that means Nigerians are receiving less than 3,000MW to their homes and offices, BusinessDay investigation has revealed.

Our investigation showed that the electricity market shortfall has now ballooned to a hefty N90 billion monthly or over N1 trillion a year on account of the massive devaluation of the naira, which has led to an unprecedented surge in the price of gas, a key energy input in Nigeria.

Nigerians who are already hammered by rising petrol price and a devalued naira with resulting inflationary pressures plus an erosion of purchasing power now get electricity less and less lately, and consumers could now be asked to pay as much as as N110 per kWh or a 50 percent jump in some of the premium bands to cover for the market shortfall that has now emerged and for the sector to be cost-reflective.

Read also: Top firms battle rising costs as energy bill hits N221bn

It seems like déjà vu all over again as energy subsidies, which created a national crisis have reared their ugly head largely on the back of the massive devaluation and floating of the naira, according to one energy economist.

Players in the sector told BusinessDay last night that the electricity sector is facing a liquidity challenge driven initially by the six underperforming distribution companies, which until the devaluation had been unable to meet their market obligations to the tune of about N30 billion per month.

With the devaluation and floating of the naira, industry estimates show that the shortfall may have reached N90 billion per month, easily the highest shortfall in the history of the beleaguered market.

Senior electricity sector officials say the shortfall is mainly driven by the abrupt naira devaluation causing significant hike in the gas pricing and the price of generation contracts (like Azura) that are pegged to the US dollar.

The situation is all the more worrisome as the Buhari administration had reduced subsidies from a peak of almost N600 billion in 2019 to just about N100 billion last year, and at the current trajectory, electricity subsidies would hit N1.2 trillion annually (another record) in two years, officials said.

“The more pressing concern by market experts is the fact that this new subsidy is unfunded and unplanned for by the administration,” one official said. “It seems the Tinubu administration, which has yet to appoint a cabinet six months after the February election, didn’t assess the full impact of the naira devaluation on the power sector at all.”

He added: “The key problem for government and the sector now is how do you pass on such a high cost of electricity to consumers that are receiving the lowest amount of energy since privatisation in 2013.”

With the persistent liquidity issues, generation and gas supply are grinding to a halt as generation companies (GenCos), especially those using gas, are groaning under the weight of mounting debts. One of the tasks the Nasir El-Rufai-led expert team had worked on was how to set up a sustainable solution for tariff shortfalls that would allow the sector thrive while balancing the impact on Nigerian consumers in an era of falling purchasing power.

The team is also said to have undertook a robust review on the debts owed to generators and gas suppliers, with an aim to improve supply in the short term and resolve the longstanding liquidity issues.

One expert told our reporter that “with the mounting debt and the record-breaking unfunded shortfall, it is only a matter of time before the market grinds to a complete halt. And that will be devastating.”

With the inability of the government to modulate the pricing of petrol as frequently as needed because of the volatility of the naira, it is feared that billions will now be spent to cover the emerging subsidy of petrol consumption.

Experts speak of an increasing negative investor sentiment on the Nigerian electricity supply industry without clear indication and uncertainty regarding who will lead the power (or energy) sector.

Development finance institutions and Nigeria’s multilateral partners are also relooking at the commitments made to the sector, given the lack of certainty in direction and the reversal of trajectory on electricity subsidies (a key pre-condition for their support).

One investor who asked to remain anonymous said: “The Nigerian electricity sector, as it stands now, is uninvestible due to legacy policy failures and regulatory uncertainties plus the emerging massive market cash shortfall. The expectations of an El-Rufai-led reform with strong backing from Tinubu had seemed exciting to us. But with that now not happening, we are all on a wait-and-see mode.”

Current investors are also quite concerned. A GenCo investor told our reporter: “At this rate, the debts that are mounting will make anyone think twice about putting any new money in Nigeria, for the model we see is unsustainable. The progress made in the past has now been wiped out.”

AUGUST 16, 2023

By Lilian Ukagwu

Airline Operators of Nigeria has stated that Nigeria Air, the country’s proposed national carrier, may not commence operations any time soon because it does not have an Airline Operator’s Certificate.

The spokesman of Airline Operators of Nigeria, Prof Obiora Okonkwo, told The Punch in Abuja on Monday, that if Nigeria Air were to begin operations in October 2023, it would be doing so without a valid Air Operator Certificate.

Okonkwo said, “The AOC is still on stage one. I don’t want to waste my time on that thing anymore. If they are starting in October, they are going to be operating without AOC.”

Meanwhile, the CEO of Ethiopian Airlines, Mesfin Tasew, in an interview with Bloomberg TV, on Friday, revealed that the new national carrier, Nigerian Air, would begin operations by October.

He added that the firm was eager to see Nigeria Air start flying local and international routes.

Recall that Nigeria Air had been embroiled in a lot of controversy, especially in the twilight of former President Muhammedu Buhari’s administration.

It could not progress to phase two of the AOC process in June 2023, according to a letter from the Nigerian Civil Aviation Authority.

Speaking further, Okonkwo, who is also the chairman of United Nigeria Airline, added that any action contradicting the court order would be a clear violation of the law.

He expressed a belief that the court would take the necessary step to address the matter.

“The court order is still sub-exiting, so anything against that is a total violation, surely the court would do the needful.

“We have made our position on Nigeria Air known. We don’t have any more time to waste. The industry is facing a more serious challenge now, which is our priority,” he stressed.