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As Aviation Fuel Crisis Escalates Cost of Flight Operations - THISDAY

JULY 10, 2022

Flight operations in Nigeria have become precarious as airlines face abrupt disruption of flights due to scarcity and high prices of aviation fuel, which may impair profitability, writes Chinedu Eze 

After series of lamentation and protests against spiraling increase in the price of aviation fuel since February 2022, when the price of the product jumped from N180 per litre to N400 per litre till currently when it hovers around N700 per litre, Nigerian airlines have struggled to maintain flight operations despite the odds.

But theirs is a precarious existence with lurking fear that the price of the product might soar beyond their affordability, as it has been projected that without any intervention, it could rise to N1000 per liter in due time, and they would be forced to ground their operations. 

The airlines have acknowledged that the current price of aviation fuel is not sustainable because airlines are not making profits in their operation, so it is just a matter of time that some of them would begin to shut down, after they have exhausted all the creative ways to maintain safe flight service.

Control

There are indications that the federal government, the Nigerian National Petroleum Corporation (NNPC) and the airlines are in a quagmire when it comes to the supply of petroleum products. Nigeria, a major oil producer is not refining crude oil, the refineries have been in comatose for years and government has woefully failed to rehabilitate them. So Nigeria, which is oil producer, is importer of refined product.

Since the war between Russia and Ukraine, the price of crude has increased due to limited supply and high demand. Nigeria could not meet its quota of supply due to the fact that it is not producing enough for the international market and in the miasma of crude supply and refined fuel import; Nigeria has lost out because it is not enjoying any advantage in the matrix of crude export and fuel import and therefore has lost the control of the price of refined product, which is now determined by international crude oil price and market demand, as the product is deregulated.

NBS Report 

Recently the National Bureau of Statistics (NBS) disclosed that Nigeria spent N292.56 billion in the importation of aviation fuel in the first three months of the year – January to March 2022.

NBS in its Foreign Trade Statistics Report for First Quarter of 2022, aviation fuel, referred to as ‘kerosine type jet fuel’ accounted for 4.96 per cent of Nigeria’s total import of N5.9 trillion, with the commodity ranking the second most imported commodity in the country in the first quarter.

According to the NBS report, aviation fuel import in the first quarter of 2022 represented a significant increase of 287.29 per cent compared to the N75.54 billion spent on its import in the fourth quarter of 2021.

In the fourth quarter of 2021, the NBS disclosed that jet fuel import was the sixth most imported commodity, accounting for 1.27 per cent of the period’s total import figure of N5.94 trillion.

In the first quarter of 2021, there was no mention of jet fuel import in the foreign trade statistics of the NBS, despite the country recording total imports of N6.85 trillion for the period.

Furthermore, the NBS reported that the most notable import item in the period was Premium Motor Spirit (PMS), also known as petrol, which gulped N1.67 trillion of Nigeria’s import bill.

The first quarter 2022, fuel import figure, according to the NBS, represented an increase of 15.97 per cent and 142.73 per cent when compared to N1.44 trillion and N687.74 billion spent on the import of the same commodity in the fourth quarter of 2021 and first quarter of 2021, respectively.

The NBS said: “The value of total imports in first quarter 2022 stood at N5.90 trillion, this decreased by 0.67 per cent when compared with the value recorded in the fourth quarter of 2021 (N5.94 trillion); but increased by 21.04 per cent compared to the value recorded in the corresponding quarter of 2021, which is N4.875 trillion.

“In terms of Imports, in the first quarter of 2022, China, The Netherlands, Belgium, India and the United States were the top five countries of origin of imports to Nigeria. The values of imports from the top five countries amounted to N3.44 trillion representing a share of 58.34 per cent of the total value of imports. The commodity groups with the largest values among the top imported products were ‘Motor Spirit ordinary’ – N1.507 trillion), ‘Kerosene type jet fuel’ – N292.56 billion, and ‘Durum wheat (not in seeds)’ – N258.31 billion.”

Sustaining Operation

One of the major challenges faced by airlines is that the price of the key component of their operation, aviation fuel, is not steady, leading to increases on hourly basis, which could make the product to become scarce at any time, if not all over the country but at some airports, since the prices change from one state to another.

Head of Communication of Dana Air, Kingsley Ezenwa, told THISDAY that airlines are facing a serious challenge in their efforts to sustain their flight service and meet the demand of their customers and at the same time ensure they operate safely in tandem with international standard and recommended practices.

Ezenwa said the unpredictability of the price of aviation fuel, which could change at any time, makes it impossible for airlines to plan long-term. In order to cut cost, airlines have to review the profitability of the routes they operate, the load factor and the cost of operating to that destination. So airlines are in constant review of their schedule to ensure that every opportunity is maximised.

THISDAY also learnt that airlines have to do away with operating routes that cannot guarantee high load factor; so flights are stopped to certain destinations and airlines have to shrink their services to reduce their cost of operation.

“So what airlines are doing is that any route that is not yielding the expected result in terms of profitability they don’t fly. So airlines have to do their analysis well. The days that they don’t have good load they don’t operate on those days. 

“Every week we do analysis and work at the possibilities. You look at the routes that can guarantee you high passenger load. But for us, our load factor has been good. We have built goodwill and consistency that make us a very reliable airline. We plan well so we have not had the cause to readjust our flight schedule,” Ezenwa said.

He however lamented that whatever the airline earns, high cost of fuel takes it away and you can’t make projection for tomorrow because you cannot tell what the cost would be. The price of aviation fuel can increase at any time.

“There is no reason for planning; there is no stability, so you plan with what you see on daily basis. You can’t really plan well under this system. But as it is now we are still hoping that government would step in and save the airlines; because if things continue like this some airlines will be forced to close shop. You look at your business model and review your operations. There is a limit airlines can endure. It is true that airlines don’t want to downsize, but if things continue to be difficult, downsizing will become inevitable,” he said.

Reviewing Cost

The Managing Director of Flights and Logistics Solutions Limited, Amos Akpan, told THISDAY that aviation fuel has become the highest component cost of flight operation and airlines wont have any other choice than to pass the high cost to the consumers.

He said that the consequence would be that people would travel only when they must and there would be more virtual engagements than physical meetings in the business circles, as virtual interface continues to increase since after the COVID-19 lockdown.

“You can only travel when you have to, when it is compulsory. So the high cost of aviation fuel has reduced the number of people that travel by air and has increased virtual meetings. The most reliable fight is first flight of any airline. Airlines don’t have a choice but to keep their aircraft in the air. Aircraft is serviceable equipment; so you have to find a way to use it and in terms of cost, airlines are not making profit now. They are just keeping afloat. What is good for Air Peace is that it is operating international destinations. Regional destination is not profitable. It is costlier for Nigerian airline to operate regional than to operate domestic service,” Akpan said.

He added that in order to adjust to the new reality of cost of operation, airlines have to do a lot to sustain their service and this include to reduce the number of flights; that is, their capacity they are offering to travellers, reducing services on board like offering refreshments, noting that some airlines have stopped offering that. The final action, he said, would be retrenchment.

“Staff retrenchment is always the last because the danger of reducing staff is because airline business is a technical job that deals with skilled personnel, marshallers, engineers, pilots; except the service you are rendering gets so lean you trim the personnel to fit the service. But all these will happen if the price of aviation fuel continues to increase. But after cutting staff, you should be ready for extinction,” he said.

Price Determinants

THISDAY spoke to the Managing Director of CleanServe Energy Limited, Chris Ndulue, who expressed the fear that the price of the product would continue to soar, as long as there is increase in the price of crude in the international market and Nigeria is still importing the product.

“Marketers are spending more money importing refined fuel products and as long as there is demand of aviation fuel, they will continue to import but the price may rise to N1000 per litre or even more. This is affecting airlines but as long as airlines are operating there will be demand of the product but what the airlines will do is to scale down their operations and, of course, they will pass the prices to their customers,” Ndulue who is former Managing Director of Arik Air, said.

He explained that the solution to the high price of aviation fuel would be local refining, which would take time before it would be realised, noting that the price of crude is high, the exchange rate is high in addition to other logistics, including shipping cost and disruptions.

“Those importing these products are not making huge profits. The prices are high and they continue to change. The landing cost presently is over N600 per litre. The price may eventually rice to N1000; but if landing cost could be lower; if the importer could get dollars at official CBN rate, the cost could come down,” Ndulue told THISDAY.

This weekend aviation fuel sold for N725 in Lagos, N740 in Abuja and N745 in Kano and there are indications that these prices could increase at very short notice.

THISDAY learnt that airlines are finding it very difficult to continue to operate with the high cost of aviation fuel, as their fares could not be inelastic, noting that it is coming to a stage whereby travellers might stop coming to the airports, except those on government and company expense.

“The number of people travelling continues to reduce as the price increases and I just learnt that some airlines are considering grounding their fleet until the price of aviation fuels begins to come down. But that is another way of saying they would stop operating because it is difficult to stop and then start again within a short interlude,” industry insider told THISDAY.

With the latest report that the cost of crude in the international market has reduced by $12, there could be hope that the cost of refined product could also come down. That will be great relief to airlines and air travellers in Nigeria.

FG backs BOI, others on SMEs intervention - PUNCH

JULY 10, 2022

THE Vice President, Yemi Osinbajo, has commended the various intervention programmes being implemented by the Bank of Industry to support the growth and development of the Micro, Small and Medium Enterprises sector.

A statement said Osinbajo who made the commendation at the 5th National MSME Awards Dinner in Abuja, also praised the efforts of the Bank of Agriculture, the Federal Inland Revenue Service, the Corporate Affairs Commission, the Standards Organization of Nigeria among others in promoting the growth of MSMEs.

The National MSME Awards was introduced in 2018 by the Vice President to complement the activities of the National MSME Clinics, encourage and reward outstanding MSMEs doing business in Nigeria.

It stated that the 2022 edition of the awards was the fifth in the series and held on the 2022 World MSME Day as declared by the United Nations, with entries of 14,020 from businesses across the country.

Speaking at the event, the Vice President said that the relentless drive, energy and creativity of young Nigerians are the guarantee that the country will prosper and provide jobs and opportunities for the millions of youths coming into the job market yearly.

Praising the steadfastness and contributions of young entrepreneurs who won prizes at the event, the Vice President said, “These MSMEs tell the story of our country’s great economic future.

Marketers, depots fight over 16.6bn litre fuel diversion - PUNCH

JULY 10, 2022

Oil marketers and depot owners have clashed over allegations of diversion of 16.6 billion litres of fuel to neighbouring countries.

A top official of the Depots and Petroleum Products Marketers Association of Nigeria, who craved anonymity, told The PUNCH that the unabated fuel scarcity was partly due to the diversion of products to neighbouring countries by marketers.

According to the source, about 46 million litres of petrol is being diverted daily.

This means about 16.6 billion litres is allegedly being diverted annually.

Findings showed that Nigeria consumes 60 million litres of petrol daily.

“We had a meeting with the PPMC some weeks ago, and part of the complaints was that the volume we load is too high, forcing them to reduce the volume they give to us. From their records, they said marketers loaded 106 million litres per day as of April. Nigeria consumes 60 million litres per day, where are the remaining litres of fuel going? They are taken outside the country. That’s a product Nigeria is paying heavily to subsidise, and marketers are busy taking it out and denying Nigerians full benefits of what they pay for,” our source said.

The diversion allegation came on the heels of the return of long queues at filling stations across the country.

The PUNCH on Wednesday found that petrol was sold above N175 per litre, and as of Thursday, the price had increased to N180 per litre.

The Managing Director/CEO – 11plc formerly Mobil Oil Nigeria Plc, and former chairman, Major Oil Marketers Association of Nigeria, MOMAN, Tunji Oyebanji, told The PUNCH that members of the association were opposed to smuggling.

“Our members are law-abiding and can never engage in such activity. Our members own 33, 000 stations in the country, and we move about 50-60 per cent of products available for consumption. So, we are opposed to smuggling because it causes a huge problem for the country,” he said.

The Executive Secretary, MOMAN, Clement Isong, told The PUNCH that its members operate a fully integrated business model, adding that it would be impossible to smuggle products out of the country.

“They know who they are accusing, and it’s definitely not our members. We buy products from the NNPC to our depots, and then distribute them to our stations. So, they can’t be accusing major oil marketers of diversion because we run a fully integrated business model”, he said.

“If it is true, then, it takes two to tango”, National Operations Controller, The Independent Petroleum Marketers Association of Nigeria, IPMAN, Mike Osatuyi told The PUNCH when asked to react to the allegation.

Osatuyi denied the claim that IPMAN members were responsible for the smuggling of petroleum products to neighbouring countries.

“They should go and ask the Customs, police, NIA and others whether they see our members’ trucks carrying such products across the borders. Why are they accusing marketers of smuggling when we have those who are being paid to police our borders?” he said.


Domestic Airlines May Lose N5bn as FAAN Shuts Lagos Airport Runway for Lighting from Today - PUNCH

JULY 10, 2022

The Federal Government on Thursday began uploading the data of 60 terrorists and other criminals to the International Criminal Police Organisation database.

The terrorists and the other criminals were among those who escaped when a terrorist group, the Islamic State of West African Province , bombed the Kuje Correctional Centre on Tuesday night.

As of press time, it was learnt that the details of most of the escapees had already been uploaded.

The Spokesman, Nigeria Correctional Service, Umar Abubakar, who confirmed this to The PUNCH on Thursday, disclosed that the names, pictures and other data of the inmates have been circulated to other security agencies.

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When asked if the NCoS has dispatched the data of the terrorists to Interpol, Abubakar said, “They are working on it; the ones they uploaded are not too clear to my liking and the management’s liking. Hopefully, they should be through tonight.

“Yes, we have access to the (Interpol) database. Every inmate or suspect that is brought to our facility, we photograph him and have the details about him before it goes to our database.

“They are trying to upload it and work on it so we can have the details of the offences committed and have the next-of-kin and take appropriate actions.”

Asked if the service had alerted other security agencies to look out for the fleeing inmates, Abubakar stated, “Yes, we have sent the list to other security agencies but the issue is that we want to upload the information with their pictures captured for easy identification by this night (Thursday) or earliest tomorrow morning (Friday); by 8am, we should be through.”

Checks by one of our correspondents showed that the reconstruction of the bombed Kuje prison began on Thursday.

A senior officer disclosed that the walls are being fortified as directed by the government.

Responding to claims that there were no close circuit cameras at the facility, a senior officer who spoke on condition of anonymity dismissed it as untrue.

He stated, “The prison has CCTVs, it is just that the cameras do not cover as far as the gate where the soldiers are. But within the walls, there is CCTV. The pictures of the fleeing inmates have been sent to Interpol.”

It was learnt that Mustapha Umar, a man who was convicted and sentenced to life in prison by a Federal High Court in 2013 for bombing the Kaduna office of ThisDay newspapers is among the 60 Boko Haram members that escaped when terrorists attacked the Kuje Correctional Centre in Abuja on Tuesday, The PUNCH has learnt.

Justice Adeniyi Ademola had ordered that Mustapha spend the rest of his life in jail for bombing the office of ThisDay using 12 camp gas cylinders in 2012. A list of the fleeing inmates obtained by The PUNCH on Thursday showed that some suspected Boko Haram members currently standing trial are among the fleeing inmates.

Yasir Salihu aka Dan Birni, an avowed Boko Haram member who confessed to killing influential Kaduna cleric, Sheikh Auwal Albani, on the order of the late Boko Haram leader, Abubakar Shekau, is also among those who escaped. Also on the list is Kyari Goni, a former commander from Shekau’s faction who willingly surrendered to the military.

Others on the list are: Shehu Abdullahi, Suleiman Idi, Suleiman Zacharia, Yakubu Abdullahi, Yasir Salihu, Yunusa Mukaiya, Bello Haruna, Biliyaminu Usman, Sunday Michael, Bello Haruna, Bilyaminu Usman, Bukar Ali, Ibrahim Mohammed, Ikya Abur, Ismail Abdullahi, Modu Aji, Mohammed Sani, Musa Abubakar, Fannami Bukar, Faruku Waziri, Hassan Hassan, Ibrahim Musa, Idris Ojo and Ishaq Farouq

Mohammed Guja, Mohammed Buba, Abdulmannan Obadiki, Abubakar Musa, Abubakar Umar, Adamu Mohammed, Ahmadu Hagola, Asama Kanti, Baluye Modu, Bassey Kingsley, Diko Iko, Abdulkareem Musa, Andulsalami Adamu, Abubakar Habibu, Abubhakar Sadiq, and Abubakar Mohammed were also listed.

FG alerts Interpol

Also, it was learnt that the process of uploading the data of 60 escaped terrorists and other criminals to the International Criminal Police Organisation database had begun.

The Spokesman, Nigeria Correctional Service, Umar Abubakar, who confirmed this to The PUNCH on Thursday, disclosed that the names, pictures and other data of the inmates havd been circulated to other security agencies.

When asked if the NCoS has dispatched the data of the terrorists to Interpol, Abubakar said, “They are working on it; the ones they uploaded are not too clear to my liking and the management’s liking. Hopefully, they should be through tonight.

“Yes, we have access to the (Interpol) database. Every inmate or suspect that is brought to our facility, we photograph him and have the details about him before it goes to our database.

Checks by one of our correspondents showed that the reconstruction of the bombed facility began on Thursday.

A senior officer disclosed that the walls are being fortified as directed by the government.

Responding to claims that there were no close circuit cameras at the facility, a senior officer who spoke on condition of anonymity dismissed it as untrue.

He stated, “The prison has CCTVs, it is just that the cameras do not cover as far as the gate where the soldiers are. But within the walls, there is CCTV. The pictures of the fleeing inmates have been sent to Interpol.”

Meanwhile, the Minister of Interior, Rauf Aregbesola, says an alert has been sent to all checkpoints across the country even as The PUNCH learnt that officials of the Nigeria Immigration Service had been put on notice.

In a statement on Thursday, Aregbesola admitted that correctional centres across the country could only contain internal attacks but cannot withstand external force.

FG alerts immigration

In a statement by his Spokesman, Sola Fasure, titled, ‘Armed Invasion of Kuje Correctional Centre’, Aregbesola said from all indication, Boko Haram terrorists were behind the attack.

“As we speak, security personnel are combing the whole area, up to a distance of 100km radius, looking for them. All checkpoints nationwide have been put on alert. More than 400 of them have been brought in and more are still coming,” he stated.

He added, “After the Abolongo, Oyo State, attack on a correctional facility, in October last year, it became apparent that a new form of attack for which our system was not prepared had emerged. Our system was primed to prevent and foil internal disturbance and riots, not external attacks/invasions since the facilities were usually built around police and military formations.”

In a statement, the Spokesperson for the Zamfara State police command Mohammed Shehu, said the command had intensified efforts to ensure adequate security at all the major roads in the state.

Also, the Ogun state police command on Thursday said the command had deployed heavy presence of police around the correctional centres to avert any attack.

The Police Public Relations Officer, Abimbola Oyeyemi, therefore stated that there was no cause for alarm.

In Katsina State, the police and immigration said the appropriate security arrangements were already in place to prevent escapees from Kuje to use borders in the state to escape from Nigeria.

The Spokesman for the Katsina NIS, Kabir Lawal, told The PUNCH that although Jibia and Kongolam border posts were under separate commands and not under Katsina, the NIS had appropriate security arrangements to prevent miscreants from using Katsina borders as their escape routes to neighbouring countries.

The Spokesman for the Katsina State police command, Gambo Isah, in his reaction said the command had the responsibility of ensuring safety of lives and property in the state.

Meanwhile, a tally by The PUNCH showed that no fewer than 4, 443 inmates are on the run after nine successful jailbreaks in the last seven years. Aregbesola had stated in December last year that 3,906 inmates were still on the run. With 443 having escaped on Tuesday night, the figure is now about 4, 443.

Also, 18 jailbreak incidents have been reported since the commencement of the regime of the President, Major General Muhammadu Buhari (retd) with nine successful attempts reported analysis by The PUNCH has revealed.

Between October 2020 and July 5,2022, correctional centres in 11 states and the Federal Capital Territory have witnessed several jailbreaks.

According to the Ministry of Interior, a total of 1,993 inmates were freed from two Nigerian Correctional Service Custodial Centres in Benin City and Oko in Edo State in October 2020.

On October 22, 2020, a total of 58 inmates were released from the facility in Okitipupa local government of Ondo State, after thugs broke in. The attackers destroyed properties belonging to the prison and injured staff on the premises.

On the same day, October 22, 2020, three attempts were foiled at the Ikoyi facility, Lagos, Afara Umuahia Correctional Centre, Abia, NCOS Warri, Delta state. However, the foiled attack led to the death of warder.

Six months later, on April 5, 2021, the Ikoyi centre witnessed another attack which was described by the Minister of Interior, Rauf Aregebesola, as the worst in the recent history of the country, hoodlums broke into the correctional facility with explosives and dynamite and freed about 1844 inmates in an operation that lasted from 1am to 3am.

On April 4, 2021, gunmen attacked a correctional centre in Owerri, the state capital, and freed 1,844 prisoners. Officials said in all, 84 inmates were returned to the facility.

On April 9, 2021, two officials of the Nigerian Correctional Service in Bauchi sustained injuries after a riot at the facility. Five of the inmates were injured in the process, but no inmates were able to escape after the riot.

Also, on September 13, 2021, armed men attacked the prison facility in Kabba, Kogi, North-central Nigeria, killing two officials and freeing 240 inmates.

On October 22, 2021, the Abolongo Custodial Centre was attacked and 837 inmates escaped from the facility, but the interior ministry said 262 had been recaptured.

On November 28, 2021: The most recent jailbreak occurred on Sunday when gunmen stormed the medium security custodial centre, Jos, releasing 262. At least 10 inmates were killed during the encounter and one security personnel also died. So far in 2022, a total of three attacks have been reported while two have been unsuccessful.

In an interview with The PUNCH, a security expert, Chidi Omeje stressed the need for the effectiveness of security operatives in the country.

Another security expert, Nnamdi Anekwe stressed the need for a reform of the prison system.

Lawan laments

In a related development, President of the Senate, Ahmad Lawan has said that Tuesday’s attack on the Kuje Medium Security Custodial Centre by terrorists speaks volumes about the failure of the country’s security architecture.

Lawan who led a delegation of the leadership of the Senate to assess the level of attack on the correctional facility, faulted the prisons authorities for not providing Closed Circuit Television at the Kuje correctional facility and others across the country.

He added, “The attack on this correctional facility is symptomatic of the failure of security failure. The attack is only a culmination of the failure of security systems.

“We were told that an estimated 300 terrorists attacked this facility. They came on foot, and I believe they should have been detected. In the first place, 300 people will not come for an operation like this without planning. Planning must have taken a week, a month or a bit more.

Briefing the lawmakers earlier, the Commanding Officer of the Nigerian Army Battalion in Gwagwalada, Lieutenant Colonel Adisa, told the Senate Leadership that over three hundred insurgents were behind Tuesday’s attack on the Kuje medium security custodial facility.

According to him, only a total of 50 security operatives were on the ground when the terrorists armed with IEDs stormed the facility to release the insurgents.

Reacting to the jail break, rights activist, Femi Falana (SAN), has alleged the Federal Government had foreknowledge of the Kuje attack.

Falana said this at the Nigerian Institute of Quantity Surveyors, Lagos State Chapter’s 14th Distinguished Lecture Series themed “Professionals in Partisan Politics: Appraising their roles in Envisioning Economic Growth and Development of Nigeria,” held in Lagos on Thursday.

He accused the Federal Government of merely creating a false impression of concern, and that the government indeed knew about the attack at the medium-security facility.

In a related development, the International Organisation for Peace-building and Social Justice has said the Islamic for West Africa Province activities against state targets have reduced the capacity of security operatives in the country.

The organisation said the activities of ISWAP showed that the group was more tactical in their operations than the Boko Haram terrorists.

A report by the organisation released on Tuesday added that despite the killing of their key leader in 2021, ISWAP had recruited more than 5,000 fighters.

The report partly read, “The emergence of ISWAP as the regnant Islamist extremist organisation in Nigeria is a concerning development. The group has concentrated its activities against state targets, reducing the capacity of the military, police, and security services, whilst impacting morale.”

Nigeria, African Airlines Show Signs Of Recovery - NEW TELEGRAPH

JULY 11, 2022

African airlines seem to be returning to profitability. The last three years had been excruciating for airlines and the travel industry. It was a crisis that ‘crumbled’ literally the entire global travel industry. But since the relaxation of COVID-19 rules, airlines and the travel trade operators have dusted themselves up by posting fantastic financial results.

Although the carriers are not yet back to their pre-COVID- 19 state, they have shown remarkable signs to bounce back. Nigerian carriers are not doing too badly despite a very poor economy. With the high airfare introduced in the wake of the astronomical cost of Jet A1 and the harsh economic situation, they have been able to remain afloat, although they are not out of the woods yet.

 
 

With the increase in the number of airlines in operations and about four others that are on the verge of securing their all-important Air Operators Certificate (AOC), Nigeria is seeing a boom in domestic airline operations despite the ravaging impact of COVID-19 on aviation and travels.

Amid the gloom of the pandemic, Nigeria’s domestic carriers are said to be on their way to recovery with more interconnectivity by the carriers linking remote airports to others; a new strategy to bring air travel to every part of the country.

 
 

While airports are opening up in many places like Anambra and Bayelsa, among others, the desire to connect these aerodromes is high with short distances like Lagos to Ibadan, Ibadan to Ilorin, Ibadan to Akure, Abuja to Kaduna, Asaba to Port-Harcourt among others that are not helped by the high-level kidnapping on the roads.

Meanwhile, the continent’s carriers had a 134.9 per cent rise in May RPKs versus a year ago. May 2022 capacity was up 78.5 per cent and load factor climbed 16.4 percentage points to 68.4 per cent the lowest among regions.

The International Air Transport Association (IATA), at the weekend, announced passenger data for May 2022, showing that the recovery in air travel accelerated, heading into the busy Northern Hemisphere summer travel season. Nigerian airlines and other African airlines had a 134.9 per cent rise in May RPKs  versus a year ago.

May 2022 capacity was up 78.5 per cent and load factor climbed 16.4 percentage points to 68.4 per cent the lowest among regions. The industry has returned to year-on-year traffic comparisons, instead of comparisons with the 2019 period, unless otherwise noted.

Owing to the low traffic base in 2021, some markets will show very high year-on-year growth rates, even if the size of these markets is still significantly smaller than they were in 2019. Total traffic in May 2022 (measured in revenue passenger kilometers or RPKs) was up 83.1 per cent compared to May 2021, largely driven by the strong recovery in international traffic.

 
Global traffic is now at 68.7 per cent of pre-  crisis levels. Domestic traffic for May 2022 was up 0.2 per cent compared to the year-ago period. Significant improvements in many markets were masked by a 73.2 per cent year-onyear decline in the Chinese domestic market due to COVID- 19-related restrictions. May 2022 domestic traffic was 76.7 per cent of May 2019.

International traffic rose 325.8 per cent versus May 2021. The easing of travel restrictions in most parts of Asia is accelerating the recovery of international travel. May 2022 international RPKs reached 64.1 per cent of May 2019 levels.

“The travel recovery continues to gather momentum. People need to travel. And when governments remove  COVID-19 restrictions, they do. Many major international route areas – including within Europe and the Middle East- North America routes – are already exceeding pre-COVID-19 levels. “Completely removing all COVID-19 restrictions is the way forward, with Australia being the latest to do so this week.

The major exception to the optimism of this rebound in travel is China, which saw a dramatic 73.2 per cent fall in domestic travel compared to the previous year.

Its continuing zero-COVID policy is out-of-step with the rest of the world and it shows in the dramatically slower recovery of China-related travel,” said Willie Walsh, IATA’s Director- General.

 
 

Heathrow cancels more than 60 flights before lunchtime - THE TELEGRAPH

JULY 11, 2022

Heathrow has cancelled more than 60 flights this morning and warned it could ask airlines to slash more capacity as the summer of travel chaos continues.

The airport has cancelled 61 out of around 1,100 scheduled flights due to concerns about how many passengers it could safely accommodate amid widespread staff shortages.

A Heathrow spokesman said: “We are expecting higher passenger numbers in Terminals 3 and 5 today than the airport currently has capacity to serve, and so to maintain a safe operation we have asked some airlines in Terminals 3 and 5 to remove a combined total of 61 flights from the schedule.

“We apologise for the impact to travel plans and we are working closely with airlines to get affected passengers rebooked onto other flights.”

Heathrow also apologised for recent disruption, adding it would review the schedule changes made by airlines and ask them to take further action if necessary.

Heathrow said nearly 6m passengers passed through the airport in June, taking the total for the first six months of the year to 25m.

The sharp rebound in demand means the airport has experienced 40 years of passenger growth in just four months.

It comes as the train drivers' union prepares to announce its decision on whether to strike in what could be the first national walkout across Britain's railways in 25 years.

The billionaire Benetton family have inked a deal to sell their controlling stake in motorway restaurant operator Autogrill to duty free specialist Dufry.

The deal will create a $6bn player in the travel retail market, with the Benettons taking control of as much as 25pc of Dufry, which is in turn set to bid for the remaining stake of the Autogrill.

The merger comes after the Benettons agreed a deal with Blackstone to take motorway operator Atlantia private.

Alessandro Benetton, son of founder Luciano, is carrying out a shake-up of the family's holding company Edizione in the wake of the deadly 2018 bridge collapse in Genoa on a section of the road managed by its Autostrade company.

The Benettons eventually sold Autostrade to end a stand-off with the Government over the disaster.

London Hit With Dangerous Heatwave That Could Get Worse - BLOOMBERG

JULY 11, 2022

(Bloomberg) -- London is in the midst of a potentially dangerous heatwave that’s also spreading across western Europe, with little relief in sight.

Temperatures in UK capital are set to hit 31 degrees Celsius (87.8 degrees Fahrenheit) Monday, according to the Met Office. Early next week could be even hotter in the south of England. 

The scorching weather follows Europe’s third-warmest June on record, underscoring the consequences of a warming planet. Temperatures are expected to be higher to much higher than normal in southern UK, France, Germany and Italy through the middle of next week, according to forecaster Maxar Technologies.

“When it comes to summer heat, climate change is a complete game changer and has already turned what would once been have called exceptional heat into very frequent summer conditions,” said Friederike Otto, senior lecturer in climate science at Imperial College London. “Every heatwave we experience today has been made hotter because of the fossil fuels we have burned over the last decades in particular.” 

Health Alert

The Met Office on Monday issued a Level 3 heat-health alert, which requires social and health-care services to take actions to protect high-risk groups, such as the elderly, young children and people with respiratory problems. 

With periods of extreme heat likely to become more common in the UK, local government councils will be working to ensure communities can be kept safe, said David Fothergill, chairman of the Local Government Association’s Community Wellbeing Board.

The Met Office expects a slight cold front may bring down temperatures on Wednesday, before very hot temperatures return during the weekend. 

“Temperatures are likely to build again with another hot spell lasting into the start of next week that could see temperatures higher than at the moment for southern areas of the UK especially,” Annie Shuttleworth, a meteorologist for the Met Office, said by email.

Energy Impact

The rise in temperatures is adding pressure to already-high energy prices, as people turn on air conditioning to keep cool.

UK power prices for Monday reached the highest level since June 29, though they eased slightly for Tuesday, according to Epex Spot SE data. Wind generation is set to climb throughout the day Monday and into Tuesday morning, bringing some relief to prices.

Power demand in Britain is forecast to peak at 34.6 gigawatts at 6 p.m. on Monday before slipping on Tuesday, according to data from National Grid Plc.

Air Canada Is Left Behind as Nation’s Airports See Major Delays - BLOOMBERG

JULY 11, 2022

(Bloomberg) -- Air Canada’s hope for a strong recovery in 2022 has been foiled by chaos at Canada’s biggest airports.

Travelers are back in big numbers as the summer vacation season kicks off. But Toronto’s Pearson International Airport has descended into scenes of long lines and a sea of luggage, and the nation’s largest airline is paying the price.

About 65% of Air Canada flights tracked by FlightAware.com were delayed on Friday and Saturday, again making it one of the worst-performing airlines in the aviation website’s daily rankings. More than half of Pearson departures -- for all airlines -- took off late on those two days, the site said. Nearly half of departures from Montreal’s Trudeau International were delayed on Saturday.   

Like other large carriers, Air Canada has cut back its summer schedule, canceling about 9,000 flights to relieve pressure and improve operations. Investors have been unimpressed: the shares have fallen 23% in three months for the second biggest decline in the Bloomberg Americas Airlines Index. Air Canada is worst performer in that index since the onset of the Covid-19 pandemic in March 2020. 

Travel bottlenecks are a problem globally as airlines and airports struggle to hire and train enough people to handle a wave of passengers who want to fly after two years of Covid restrictions. British Airways last week scrapped another 10,300 flights; Deutsche Lufthansa AG, EasyJet Plc, Delta Air Lines Inc. and other carriers have made similar moves. It’s all leading to a lot of finger-pointing as airlines, airports and governments seek to shift blame. 

Air Canada says it has 32,000 employees compared with 33,000 prior to the pandemic, yet is operating only 80% of its June 2019 schedule. Despite that, it still faces a shortage of baggage handlers and other staff, said Cowen Inc. analyst Helane Becker. 

It’s been a long process of hiring workers after Canada kept Covid-19 travel restrictions in place longer than the US did, forcing Air Canada and other employers to constrain their capacity growth last year. 

“It just isn’t that easy to turn things around,” Becker said. “There is a fair amount of new employees, so there’s a learning curve.” She thinks that delays and cancellations could continue until the middle of next year. 

Ahmad Rawanduzy’s daughter arrived in Toronto from Frankfurt, Germany, through an Air Canada connection in Montreal on July 1 and could not find her luggage. Three days later, they received a text message saying that her bags were at Pearson airport. Upon arrival, they were informed that the bag was still in Montreal without a tag. 

Rawanduzy, who lives in a city about 45 minutes away from the airport, said the process is frustrating because of “the traveling chaos, the price of gas, and paying for parking for a few hours at a time.” 

The delays have heaped pressure on the federal government, which has been criticized for being too slow to handle passport applications and hire security staff to deal with passengers. Transport Minister Omar Alghabra said in a statement Friday that nearly 1,200 screening officers have been hired since April and asserted that things are getting better. 

At Pearson, 79% of travelers got through security lines within 15 minutes during the week of June 27, Alghabra’s office said in a statement Friday. Rachel Bertone, a spokesperson for Greater Toronto Airports Authority, said there have been “improvements both on the arrivals and departures sides.” 

Rising cases of Covid-19 are exacerbating the problem. Short-notice schedule changes sometimes happen because members of the flight crew are forced to isolate with virus symptoms, a positive test or because they came into contact with an infected individual, Air Canada said in an email to a customer that was seen by Bloomberg. 

Air Canada spokesperson Peter Fitzpatrick said the airline is working with airports to streamline operations and improve the movement of baggage. Reductions to the summer schedule will also help alleviate pressure on airport gating, customs and air traffic control, he said. 

“The system has never been stressed like this before,” said Richard Aboulafia, managing director of aerospace consulting firm Aerodynamic Advisory LLC. “I think it’s going to be a brutal summer.” 

Fuel hits N250/litre in Abuja, others, queues spread - PUNCH

JULY 11, 2022

Some filling stations in Lagos, Abuja, Niger and other states dispensed Premium Motor Spirit at between N200/litre to N250/litre on Sunday, higher than the government-approved retail price of N165/litre, as queues for the product extended to more states.

It was gathered that the worsening queues for petrol in Lagos and neighbouring states, as well as its prolonged persistence in Abuja and environs, were due to the insufficient supply of products by the Nigerian National Petroleum Company.

NNPC is the sole importer of petrol into Nigeria for several years running. It often claims to have enough products to keep the country wet for months. It, however, stayed mute on Sunday when contacted.

Our correspondents gathered that some filling stations in Lagos sold petrol to motorists at N200/litre and still had queues, as black marketers dispensed the product at N300/litre.

In Abuja, Khalif filling station in Kubwa, dispensed the commodity at N250/litre on Sunday but had N165/litre displayed on its pumps. But once a motorist tells the fuel attendant the amount he or she wishes to buy, this would be calculated based on N250/litre.

The queues for petrol in Abuja has never ceased since February this year, but it grew worse in neighbouring states of Nasarawa and Niger on Sunday as motorists search for PMS to move around during the Sallah break.

Oil marketers denied claims of product hoarding or diversion, as they stressed that the insufficient supply of PMS by NNPC and the non-payment of bridging claims for the transportation of petrol were the key reasons for the scarcity.

The President, Petroleum Products Retail Outlets owners Association of Nigeria, Billy Gillis-Harry, told our correspondent that filling stations that had products were dispensing, while those that were shut had no petrol to sell.

He said, “The problem is that every side needs to be transparent. We as retail outlet owners are ready to sell petroleum products to the teeming Nigerian public. We have no reason why we should not sell our products.

“The money used in buying the 45,000 litres of petrol from depots, almost N7m, is borrowed, and time-bound. So every retail outlet owner knows that the wise thing to do in this business is to sell out and try to turn around that sale as many times as possible.

“So with this scenario in view, there is no retail outlet owner that is hoarding product or diverting it. Yes, we know there may be bad eggs among the good bunch, but the fact that we are not having sufficient products is what has remained the cause of fuel scarcity.”

Gillis- Harry added, “In the case of Abuja, it is clear to understand that if the bridging claims are paid to marketers, they will be able to continue their products’ purchase cycle. That is just the reality. So payment of bridging claims is an issue and insufficient supply is also another issue.

“This is because if there is product and there is money for us to buy, then why won’t we buy and sell? What else are we in business for? Are we going to buy products and keep them? The answer is no! So this is the reality.”

On what could be the solution to the current crisis in the downstream oil sector, the PETROAN president stated that everything still boiled down to the need to end the current fuel subsidy regime.

He said, “There is a solution and it is simple. The subsidy that is being paid should be stopped. The money should be channeled to other developmental infrastructures such as health, education, etc.

“And since the refineries have not been fixed by the government, they should either give it wholly to private sector practitioners like PETROAN that own the retail outlets to manage.”

The NNPC stayed mum when asked to react to claims of insufficient supply of petrol by the national oil company. Its spokesperson, Garba-Deen Mohammad, did not answer calls and had yet to respond to a text message sent to him on the matter.

Fuel price hits N200/litre in Lagos, scarcity persists

Further checks show that some filling stations in Lagos and Ogun states sold fuel at N200/litre.

While many stations were under locks and keys despite a promise by the NNPC to keep the country wet, many among the few that had products were seen dispensing above N200/litre.

According to findings, the Federal Government and oil marketers are yet to come to a compromise on how much a litre of petrol should be sold, and marketers are beginning to sell products at prices not approved by the Nigerian Midstream and Downstream Petroleum Regulatory Authority.

The continuous rise in prices comes on the heels of recent threat to withdraw the licenses of marketers that sell above official price of N165/litre issued by Chief Executive, NMDPRA, Farouk Ahmed.

A source close to the matter had told The PUNCH that marketers met with Ahmed in Abuja last week, where he pleaded with them not to increase their pump price.

“The meeting was held with NMDPRA last week, and Mr. Farouk begged marketers not to increase the price. But the long queues you are seeing are due to inadequate supplies. Marketers have also gone ahead to increase prices unofficially due to high operational costs. There was no formal letter to the effect though. It was just a word of mouth agreement to increase price between N175-N180 per litre”, our source said.

He advised the government to issue a statement on the marginal increase in the pump price of petrol.

Executive Secretary of the Major Oil Marketers of Nigeria, MOMAN, Clement Isong, declined to comment on the causes of the rising petrol prices.

The PUNCH had recently reported that oil marketers were currently pushing for compensation from the Federal Government if petrol would remain at N165 per litre.

Among other things, marketers are lamenting high operational costs due to rising diesel price which is currently being sold above N800/litre at depots. There are fears that diesel prices could hit N1500/litre if nothing is done to tame prices.

The National Operations Controller of Independent Petroleum Marketers Association of Nigeria, Mike Osatuyi, however, debunked allegations that NMDPRA and marketers secretly agreed to increase the price.

“That’s not true. There is no letter to that effect from NMDPRA,” he said.

However, when asked why the fuel price was rising, he said it was due to the hike in the price of diesel.

“Those stations you see that sell above N165 do so because they have to recover their costs,” he said.

On when the Federal Government would pay marketers the promised bridging claims, he said the payment process could stretch till July ending.

“Marketers are just submitting their claims and they will be verified first. So payment could be by the end of July,” he said.

Reacting to the continuous price face-off between the Federal Government and marketers, industry analyst and former Group Chairman/CEO, International Energy Services Limited, Dr. Diran Fawibe, said the issue of fuel supply appeared to have defied solutions.

“Everybody is throwing figures about costs and prices to sell and what not to sell. At the end of the day, it’s the consumers that will bear the brunt. What we have noticed is that prices vary from station to station, and from state to state, and obviously, that’s what the bridging payment by the Federal Government was supposed to address”, he said.

On his part, Chief Executive Officer, Centre for the Promotion of Private Enterprise and former Director-General, Lagos Chamber of Commerce and Industry, said the current price was not sustainable.

According to him, the government is not in any way in the best position to control the prices of petrol if it cannot control diesel prices.

Commuters groan as transport fares rise

Meanwhile, findings by our correspondents show commercial buses have increased transport fares significantly, following the development.

According to residents from Alagbole-Akute axis of Ogun State, transport fares have increased by 50 cent – 100 per cent with bikes and buses becoming scarce. The residents blamed the situation on the fuel scarcity that has begun to manifest as long fuel queues and the reduction in the number of bikes plying the area as a result of the Sallah break.

One resident, who identified himself as Tayo Okediji, said, “Alagbole to Berger was between N200 and N300 today. There are more commuters on the roads because most of the bike operators are observing the Sallah break, and the few available ones have hiked the price. According to them, there is no fuel.”

U.S. recession looks likely — and there are 3 ways the economy could get hit, analyst says - CNBC

JULY 11, 2022

KEY POINTS

  • The odds of the U.S. economy falling into recession by next year are greater than 50%, TD Securities said Monday.
  • Outlining three potential risks, the investment bank named rising gas prices, a hawkish Federal Reserve and a generally slowing economy.
  • “The odds of a recession in the next 18 months are greater than 50%,” global head of strategy, Richard Kelly told CNBC.


Rising gas prices are piling pressure on the U.S. economy. Rising gas prices are piling pressure on the U.S. economy. Bloomberg | Getty Images

The odds of the U.S. economy falling into recession by next year are greater than 50%, Richard Kelly, head of global strategy at TD Securities, said Monday, outlining three possible ways it could get hit.

Rising gas prices combined with a hawkish Federal Reserve and a generally slowing economy are among the tripartite risks facing the world’s largest economy right now, according to Kelly.

Could that raise the possibility of a recession? “I don’t think it’s a potential,” he told CNBC’s “Street Signs Europe.”

“The odds of a recession in the next 18 months are greater than 50%,” Kelly added.

Exactly when that downturn might hit is harder to predict, however.

Kelly said the economy could slip into a technical recession — defined as two consecutive quarters of negative growth — as soon as the end of the second quarter of 2022. Analysts will be closely watching the Bureau of Economic Analysis on July 28 for early estimates on that.

Alternatively, the fallout from surging gas prices following Russia’s unprovoked invasion of Ukraine and the Fed’s continued interest rate hikes could both weigh on the economy by the end of the year or into early 2023, he said.

And if the U.S. manages to weather all of that, a general slowdown could take the wind out of the economy’s sails but mid- to late-2023.

“You really have three shots at a recession right now in the U.S. economy,” said Kelly.

“We haven’t even hit the peak lags from gas prices, and Fed hikes really won’t hit until the end of this year. That’s where the peak drag is in the economy. I think that’s where the near-term risk for a U.S. recession sits right now,” he continued.

“Then, if you get past that, there’s the overall gradual slowing as we get into probably the middle or back half of 2023.”

Investment firm Muzinich agreed Monday that a forthcoming recession was not a matter of “if” but “when.”

“There will be a recession at some point,” Tatjana Greil-Castro, co-head of public markets, told CNBC, noting that the forthcoming earnings season could provide a gauge for when exactly that might occur.

“Where earnings are coming in is for investors to establish when the recession is likely to happen.”

The comments add to a chorus of voices who have suggested that the economy could be on the cusp of a recession.

David Roche, veteran investment strategist and president of Independent Strategy, said Monday that the global economic outlook had recently shifted, and it had now become easier to assess how different parts of the world might respond to various pressures.

“You can now make detailed prognosis for different parts of the world which are themselves very different from the simply blanket recession picture,” he said.

Roche said he considered a recession the loss of 2-3% of jobs in a given economy, suggesting that a U.S recession may be some way off. Data published Friday by the Bureau of Labor Statistics showed stronger-than-expected jobs growth, with nonfarm payrolls increasing by 372,000 in the month of June, well ahead of the 250,000 expected.

However, he noted — not for the first time — that Europe is on the brink of what he calls a “war-cession,” with the fallout from the war in Ukraine piling economic pressure on the region, particularly as it pertains to energy and food shortages.

“Europe may be hit by an energy crisis all of its own which produces the war-cession. The recession caused by war,” he said.

It comes as Nord Stream 1, the primary pipeline supplying natural gas to Europe from Russia, is shut down this week for maintenance, raising concerns that it could be turned off indefinitely due to ongoing disputes over Ukraine sanctions.

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