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COVID-19: Unlocking new opportunities for Nigerian airlines



images 98 2 COVID-19: Unlocking new opportunities for Nigerian airlines

It’s 5.30am Wednesday and the early morning bird perched on the apron of the General Aviation Terminal (GAT) of the Murtala Muhammed Airport, Lagos beckons on its passengers to come onboard.

In the months prior to the outbreak of COVID-19, its patience was often tasked by delays caused by long queues of guests wading through the GAT lone scanning machine to access seats allotted to them in its luxurious cabin.

But today, the queues have eased; passenger patronage for the local airline industry appear to have dropped drastically, especially on the not-so-lucrative routes, forcing most investors in the sector to demand that the government create the infrastructure for other business opportunities outside the airlift of passengers, like the resuscitation of the aggro-cargo airports project.

Without doubt, the absence of multiple gates and scanners at the Lagos MMA1 domestic terminal, has more than any other factor, led to flight delays, especially for early morning flights where hundreds of passengers have to squeeze through the single entry scanning point to meet up appointments in Abuja and Port Harcourt. Very often flights scheduled for 6.45am would not depart until 7am as pilots are forced to wait for trapped passengers inside the terminal building.

But this wet Wednesday morning was, however, quiet different. The airport terminal appeared to have slowed down on its once fast pace; less busy, less noisy, but more friendly was the ambience as passengers’ facilitation became faster for airlines and airports staff.

Queues vanishing with money

Settling down on the Boeing 737-500 aircraft emergency seat allocated to him, Alphonsus Isoh, a passenger on the Lagos – Abuja 6.45am Air Peace flight noticed a familiar face. It was a cabin crew he once complained about the notoriety of airlines not keeping to scheduled departure time to. He waits for him to finish the mandatory safety briefing for passengers sitting on the emergency exit and then quipped with a smile.

“We are keeping to time today; I should arrive Abuja on time to honour a 9am appointment.”

Indeed, the resumption of domestic flights in Nigeria has seen a reduction in the number of passengers flying. Where aircraft once had 80-95 per cent passengers onboard, it has dropped to 40 per cent. It is estimated that airlines, airports, regulatory establishments and associated business, could be losing about N200 – N300 million daily due to low passenger traffic following the resumption of flights after the forced shutdown to curb the spread of COVID-19.

“The queue has disappeared; but with our money,” the crew joked in response to Isoh’s question. “But we will be too glad to have it back.”

Resolving immediate challenges

According to Aviation Minister, Hadi Sirika, the government’s target is to grow the sector’s contribution to national GDP from the abysmal 0.6per cent to one per cent.

However, with the absence of a vibrant national carrier following the liquidation of Nigeria Airways, the only hope of the country’s aspiration to improve earnings from the aviation sector is through a deliberate government policy and support to existing private sector driven or flag carriers.

Sadly, these carriers, like Air Peace, Dana Air, Arik Air and Aero Contractors are weighed down by a myriad of problems, among them, high cost of aviation fuel, scarcity of forex for spares and maintenance, as well as multiple taxation to various agencies.

These challenges when added to reduced income due to low passenger traffic means the airlines are no longer running as profitable ventures. President of the National Association of Nigeria Travel Agents (NANTA),Susan Akporiaye, told Daily Sun that the industry was already facing redundancy and that most establishments were laying off workers, no thanks to the fact that the airlines are no longer flying at optimal capacities.

A proof it can be done

In recent weeks, the Federal Government has launched some protectionists policies to support local airlines against foreign carriers who fly into the country, but deny or stifle Nigerian carriers quest to operate into their airports. And the government has been commended for this move.

And there is no doubting the fact that the crisis that attended the COVID19 pandemic, offered at least, one Nigerian carrier, Air Peace Airline, the opportunity to showcase what the local industry can do if given the right government support.

Air Peace indeed put paid to the cheap blackmail of lack of managerial, technical and operational expertise of wholly-owned Nigerian airlines successfully operating in the international market.

Anselm Ukoh, a travel agent who had some of its clients stranded in Nigeria and seeking to depart for China to be united with families lauded the management of the airline for investing in the acquisition of the three Boeing 777 aircraft that boosted the its fleet size with the right equipment and capacity to operate long haul evacuation flights to China, Israel and India during the peak of the pandemic.

He recalled that it was the same aircraft that was deployed to airlift stranded and dehumanised Nigerians suffering xenophobic attacks in South Africa last year. One can only imagine what could have befallen these trapped Nigerians if there was no local airline with the capacity to undertake these long haul flights.

“To the pride of Nigeria, Air Peace rose to the occasion in fulfilment of its designation as a flag carrier. From moving the first batch of medical supplies from Istanbul, Turkey to freighting the second batch of medical supplies and medics from Beijing, China, to evacuating 301 Chinese, the Nigerian carrier showed it had all that is required to operate the 14-15 hours flight on its B777-200 between Lagos – Beijing – Abuja flights. The airline also successfully transported stranded passengers from Nigeria to Israel for the first time and then to India,” Ukoh said.

“Air Peace indeed made good use of the COVID19 challenge to prove what a Nigerian airline can do if given the opportunity. It is instructive to note how airfares on the lucrative Lagos-Abuja-Dubai route crashed since July 2019 following the launch of Air Peace Airlines operations on that route. During the COVID-19 operations, the airline also crashed fares on the London route, something considered impossible. We are also seeing for the first time a Nigerian airline making a firm order for 10 brand new Embraer 195-E2 aircraft valued at $2.1 billion which it plans to deploy to underserved and unserved domestic and regional routes under its no-city-left-behind project. This provides sufficient reason for government to support the local airlines in all aspects to grow and remain profitable. It is not the time to take steps to stifle, strangulate or kill any investment by Nigerians in the sector,” Ukoh added.

The giant strides of Air Peace certainly proves to doubting Thomas’s the capability of Nigerian airlines to weather the turbulent storms of the global aviation industry with quality service delivery to customers if the right support and opportunities are created by the government. Under the post COVID-19 era, more government support would be required to sustain the operations of local airlines within and outside the country.

This is not the time for government and regulatory establishments in Nigeria to take sides with foreign interests against its own airlines.

Unlocking dormant opportunities

Lagos based agro-econonists, Maxwell Etim said with the decline in passenger traffic for domestic and international flights, it was time the government resuscitated the perishable cargo airport project to create new business opportunities that local airlines can tap into.

The perishable or agro-cargo airport project was launched in 2013 as part of efforts to diversify the Nigerian economy, grow national earnings and boost GDP contributions from the aviation and agricultural sectors, but has been confined to the dustbin of history.

The target was for Nigeria to leverage the over N250 billion annual air freight export market out of Africa where the country was recording zero participation policy discourse around the project since after its launch have gradually gone down. But while countries like Kenya, South Africa, Benin, Cote d’Ivoire, Ghana, Senegal, Ethiopia, Tanzania and Egypt are heavily participating in trading in commodities like fruits, fresh fish, vegetables and flowers and earning millions of dollars annually from the trade, Nigeria, which also produces these produce in abundance lacks the requisite infrastructure to compete. So far, Nigeria has watched helplessly as European, Asian and American cargo aircraft continue to freight into country daily huge tonnes of cargo, but fly out empty with no cargo from Nigeria.

It was in a bid to stem this imbalance in trade, that the Federal Government designated 13 cities including Abuja, Akure, Calabar, Ilorin, Jalingo, Jos, Kano, Lagos, Makurdi, Minna, Owerri, Port Harcourt and Uyo as pilot schemes for perishable cargo airports. The airports in these cities which are in close proximity to communities considered as food baskets of Nigeria were to be developed with international standard perishable cargo storage and export facilities to enhance their operations.

Outside Lagos, the government abandoned the perishable cargo projects in the other designated cities that showed strong business prospects like Owerri, Benue, Akure, Uyo, Jos, Jalingo among others. But despite the inherent benefits to Nigeria and its huge farming population, the government of President Muhammadu Buhari has not considered it necessary to speed up the review or redesign of the project.

It is an ugly trend acknowledged by the Director General and CEO of IATA, Mr. Alexandre de Juniac, who at the 2018 Global Media Day held in Geneva, Switzerland called on the Nigeria government to put in place the right infrastructure and tax incentives that can grow the industry and allow local airlines make profits. And the perishable cargo airport is one of such critical infrastructure needed by airline operators in Nigeria’s post COVID-19 aviation industry.

Without doubt, the perishable cargo export industry can be likened to an untapped goldmine given the financial benefits it could offer to investors. Nigeria is richly endowed with lots of fresh goods currently in demand in Europe, which investors in the business can easily export and make money from. Products like pumpkin leaves, fresh ginger and garlic, white and red sweet potatoes, washed bitter leaf, water leaf, plantain, okra are in demand outside Nigeria.

The market has been created by Nigerians in the diaspora who continually yearn for these home grown foods delivered to them fresh and healthy. And in recent years, more Nigerian restaurants have sprung up in various countries across the globe, and Nigerian dishes and cuisines have become much more appreciated by foreigners. And airfreight appears to be the safest means of exporting these perishable goods to these markets. The successful implementation of the perishable cargo project would greatly boost the government economic diversification policy.

Experts have said Nigeria could be raking in an estimated $52 billion annually from the United Kingdom (UK) alone, if the full potential of the perishable cargo export industry is harnessed.

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Nigerian Government Moves To Reduce Data Cost From N1 , 000 To N390 Per Gigabyte



images 2020 10 28T153533.267 Nigerian Government Moves To Reduce Data Cost From N1 , 000 To N390 Per Gigabyte

The Executive Vice Chairman, EVC, of the Nigeria Communication Commission, Umar Danbatta, has revealed that the Ministry of Communication and Digital Economy is planning to reduce the cost of data from N1,000 to N390 per gigabyte.
Speaking to journalists in Kano on Saturday, Mr Danbatta disclosed that part of the plan was the new national broadband plan for the year 2020-2025, which says Nigeria must provide broadband connectivity, cover virtually all parts of the country and deploy 4G infrastructure also across the country.
According to him, the ministry was tasked to come up with a digital economy policy and strategies, adding that all the efforts put in place are intended to bring the cost of data down to N390 as against the N1,000 that Mobile Network Operators, MNOs, are charging.
“Actually the cost has come down to N1,000/gigabyte of data, but the government is saying that we should be targeting N390 in the next 3 to 5 years.
To achieve subsidized data cost, according to Mr Dambatta, the country must provide pervasive broadband data infrastructure.
“We need pervasive broadband data infrastructure because at the landing point in Lagos, where we have all the submarine cables. You know, that is why we have them. There is the main cable, 133, West African Sea Cable (WASC). And there is the other one which Glo company is trying to deploy.
“This, combined, have data capacity of 40 terabyte. This data capacity is at the landing point in Lagos. That is from the coast, where there is ocean. Until and unless you move this massive 40 terabyte data capacity into the hinterland because the undersea cables are terminating in Lagos.
“Hinterland consists virtually all the major cities of the country and the 774 Local Governments of Nigeria. Through this way you will be meeting demands for data with appropriate or commensurate supply of data. This is how it will enable Nigerians to pay less data tariff.
“But this massive capacity of data at landing cost can’t move itself. There is the need to build fibre cables that can carry this capacity to the hinterland.
“We are indeed pursuing the plan. There is infrastructure and company licensing framework that could give the companies the ability to afford to sell the data to the retail agents, who will sell the data to the citizens,” he explained.
At the moment, he added, the plan is not happening but is what the country intends to do to bring the cost of data down from N1,000 /gig to N390/gig, adding that the plan is an important policy of the government of President Muhammadu Buhari.
The EVC however said Nigeria is among the countries with lowest data cost in the whole Africa.
“Following observation of the ranking, which was carried out by reputable global organizations, the commission had found out that Nigeria stands in 4th position among the countries with lowest data tariff on the continent,” Mr Danbatta said.
He said Nigeria’s data cost is more than $2, adding that South Africa, despite her economic development, sells data higher than Nigeria and the country is not even among the lowest.
“It is true that Nigerians are yearning for low data prices. Nigeria has one of the lowest data tariff in Africa. When we observed the rankings by global reputable organizations, we discovered that in the rankings of data services and cost, we are like number 4.
“Virtually all the African countries were listed in the ranking. Our data price is $2 and a few cents.
“In South Africa, despite their economic development, they sell data higher than Nigeria. To be honest with you, South Africa is not even among the lowest. Cost of data services doesn’t need to come down,” he said.

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Banks fund 273,435 businesses with N1.8tr loan –CBN



download 15 1 Banks fund 273,435 businesses with N1.8tr loan –CBN

 Central Bank of Nigeria (CBN) Governor, Mr Godwin Emefiele, on Tuesday disclosed that commercial banks in Nigeria have pooled about N1.80 trillion, $1.36 billion and €10.92 million as loans to 273,435 borrowers through the Collateral Registry initiative of the apex bank.

Emefiele made the disclosure in Abuja at a virtual workshop themed; The Role of the Judiciary in ensuring the effectiveness of the Secured Transactions in Movable Assets and Credit Reporting Acts, 2017”, which was organised to sensitize Judges on efforts so far made to boost funding of entrepreneurs using movable assets as collateral for credit.According to him, the loans were given to 262,904 individuals; 1,421 large, 4,260 medium, 1,433 micro and 3,417 small businesses. He recalled that the CBN, in 2017, latched on the Secured Transactions in Movable Assets Act to launch the National Collateral Registry with a mandate to receive, register, store and provide information about security interests in movable assets.

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Lagos disburses N2.5bn recovery fund for looted businesses



images 2020 10 28T151705.405 Lagos disburses N2.5bn recovery fund for looted businesses

The Lagos State Employment Trust Fund (LSETF) has announced plans to disburse about N2.5 billion economy recovery fund to assist entrepreneurs whose businesses were torched during last week’s civil unrest across the state.

This was even as the agency said it has received about 2,500 applications from various business owners in the state.

Chief Executive Officer (CEO) of LSETF, Mrs. Tejumola Abisoye, stated this yesterday during a live interview on Channels TV Sunrise

She explained that to help reduce the impact of the wanton destruction of Medium Small Micro Enterprises (MSMEs) businesses in the wake of the #ENDSARS protests across the state, the management of LSETF decided to float the fund to cushion the effect and reflate them back to live.

The LSEFT boss said any business can apply for claims as long as there are evidences to prove that such a business has been impacted or looted as a result of the civil unrest.

She added that to ascertain the claim of a business owner in order for them to receive funding support, LSEFT would be sending down its verification partners who will be on ground to ascertain and verify each claim a business is making.

She said the MSMEs recovery fund is being managed by a steering committee because it is not only the Lagos State Government that has made funds available for this business intervention but also included the private sector.

Abisoye noted that the steering committee will determine each claim based on the verification and evaluation report provided by the business development support partners.

On the challenges of improper documentation access to funding by SMEs, she said the structure for verification will include a neighbor who knows the business and its promoter within the local government and can ascertain the existence of the business, including the membership of a business association.

‘‘A business cannot operate in isolation. There will be people in the market that can ascertain and verify the existence of the business pre vandalisation or looting as a growing concern. But should we not be able to ascertain that, then that will impact on the amount of money such a business will be able to get.

The LSETF CEO said the unfortunate development has presented an opportunity for SMEs that are not structured or registered to do so now through the help of LSETF to help formalize their businesses and improve their results.

Abisoye disclosed that businesses impacted by looting have until the October 31, 2020 to apply for the economic recovery fund, saying the agency intends to commence disbursement of funds within the next 12 days.

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