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COVID-19: The ‘New Normal’ for Nigerian aviation industry

The ‘New Normal’ would be challenging but must be adhered to if the industry must survive the outbreak.

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Fake labs, travel frustrations, passengers allege COVID-19 test Scams at airport, Aviation, Nigerians hit with over 60% delayed and cancelled domestic flights in 2018
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For the first time in world history, about 90% of the world’s citizens have been restricted from travelling, either to return home or to destinations of choice. Without a doubt, the most affected in travel & tourism is the aviation industry.

An estimated 25 million aviation jobs and 100 million travel and tourism jobs across the globe are at risk. That is not all; the growth recorded in the industry in the last seven years would potentially be lost across the world.

Coming back home, in Nigeria, most of the local airlines have either forced their workers to embark on unpaid leave, slashed salaries or dismissed their workforce. This is how Coronavirus (COVID-19) has brought the global and Nigerian aviation to a standstill.

READ ALSO: Use appropriate aircrafts or stop operations, FG to Turkish airline 

COVID-19: The ‘New Normal’ for Nigerian aviation industry

A Chart of Air passenger volumes

But will Nigeria ever fly again?

Experts at the Institute of Directors’ webinar titled “Impact of COVID-19 on Aviation Sector: The Way forward” which was covered by Nairametrics, emphasized that Nigeria would fly again, but things would not be the same. According to them, the pandemic would birth “a new normal” in the aviation industry.

At the webinar, which was moderated by the immediate past President, National Association of Nigerian Travel Agents (NANTA), the experts that were selected across the industry agreed that the new normal would be challenging but must be adhered if the industry must survive the outbreak.

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Even if borders reopened, Managing Director, Aero Contractor Airline, Captain Aso Sanusi, explained that travellers must trust that boarding a plane was safe and that they would be able to enter the destination country.

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The most immediate and perhaps most visible change the industry will witness is social distancing or touchless travel.

“Shortly before the total lockdown, we had implemented the social distancing policy and that took a lot of time. We witnessed a lot of delays because we had to ensure passengers keep safe distances at the point check-in in order to curb the spread of the virus. But physical distance policy in the aircraft will not be possible. That will not happen.”

“Passengers will have to be fit to travel, as the Yellow cards will be substituted for COVID-19 card. Passengers must arrive earlier than they used to at the airport and definitely expect more delay. The old normal turn around for local will increase from 30 minutes to over 1 hour (new normal) because aircraft will be sanitized every time the plane land.”

READ MORE: These are the sad reasons Nigerian airlines struggle and fail 

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According to him, there would also be panic at the airport or in an aircraft if certain things happened. For instance, if anyone sneezed, others would panic. “We will have to work hard to psychologically educate the passengers that the aircraft is the safest place to be,” he added.

Country Manager, Nigeria & West Africa, Qatar Airways, Kennedy Chirchir, also agreed that the new normal of the industry would mean a total paradigm shift.

To him, the development would affect airline preparations, check-in preparations together with how agencies interacted with customers and airlines.

He said, “We are moving to the digital space where physical interaction would be reduced drastically. Most of the operations will be on a digital platform. There will be more requirements in terms of the turnaround of aircraft. Before now, it takes about 1 hour for aircraft to turnaround but now it may take as long as 2 or 3 hours because there would be stricter checks. These will happen but will not stop people from travelling.”

READ MORE: Jumia is optimistic of COVID-19 boost, despite poor Q1 2020 earnings report

On the part of travel agencies, Managing Director, BTM Travels Limited, Lola Adefope, explained that the adoption of technology would be emphasized. Before this, she insisted that it was important for operators and regulatory authorities to ensure that right policies and processes were in place to drive the technology, else the nation would be placing the cart before the horse.

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What we need to do is to implement a proper education process and platform. That is to ensure people understand the risk of travel and the safety measures in place with the technology to support the process. The technology will push notifications to people directly.

“We are going to see a move to much smaller groups when it comes to actual leisure travel. Leisure travel won’t develop at the international scene immediately but we have to develop domestic tourism. We must put in place policies and processes before we open our borders for intercontinental or international tourism,” she said.

According to the BTM boss, the nation would witness a change from long distance travels, as air travellers would do more research to know about where they were going before embarking on trips, and more emphasis would be on careful travel. “The new products that will be sold in the new normal are health, safety and compliance and not comfort and leisure that was the focus in pre-COVID-19,” she added.

READ ALSO: US to stop issuing visa for Birth Tourism 

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COVID-19: The ‘New Normal’ for Nigerian aviation industry

A chart of survey data for air traveler confidence

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Executive Chairman, Phillips Consulting, Foluso Phillips, expected the new normal to birth new digital skills that would grow the aviation industry. He said the development would lead to job losses, because some people’s services would no longer be required with the advent of technology.

According to him, it is obvious that the Federal and State Governments are saddled with bigger responsibilities of public safety, decay in education sector and Nigerians should expect them to be fully involved in implementing the desired turnaround needed in the sector. He said,

“We need to privatise airports and have extremely sophisticated airports. There is no magic silver bullet, we have to try and engage the people and restore their confidence in the sector. These are the real things we must face.

READ ALSO: Aviation sector to contribute over N1.2 trillion to Nigeria’s GDP by 2020

“Let us lessen the burdens of the government. That for me is the new norm. How can we bring confidence to people? People should be able to say, ‘I want to go on vacation, as I now have confidence in the system.’”

Meanwhile, IoD organized the webinar to offer a guide that would cause the aviation sector to rebound. Bankole said, “It is important to debate and discuss these current realities and emerging trends that will shape the future world of travel. With the need for social distancing and stringent health measures that have been put in place by all responsible Governments, the cost of operations, if and when the airlines operate again, may be daunting.”

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Abiola has spent about 14 years in journalism. His career has covered some top local print media like TELL Magazine, Broad Street Journal, The Point Newspaper.The Bloomberg MEI alumni has interviewed some of the most influential figures of the IMF, G-20 Summit, Pre-G20 Central Bank Governors and Finance Ministers, Critical Communication World Conference.The multiple award winner is variously trained in business and markets journalism at Lagos Business School, and Pan-Atlantic University. You may contact him via email - [email protected]

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    Companies

    Airtel Africa signs new $500 million loan with Bank of America, HSBC, others

    The new committed facility consists of a combination of a revolving credit facility and term loans with tenor of up to 4 years.

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    Regulation forces Airtel Africa to initiate shares listing in Malawi 
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    Airtel Africa has signed a new $500 million loan facility with a group of relationship banks to partially refinance the Group’s €750million Euro-denominated bond (c.$880million) due 20 May 2021.

    The banks are Bank of America, BNP Paribas, Citibank, HSBC, J.P. Morgan, Standard Chartered Bank and two Indian relationship banks, Axis Bank and Kotak Mahindra Bank.

    This was disclosed by the Telco via a statement signed by its Group Company Secretary, Simon O’Hara on Wednesday.

    READ: Airtel’s reduced PAT position doesn’t tell the whole story

    It stated, “The new committed facility consists of a combination of a revolving credit facility and term loans with tenor of up to 4 years. The facility will be used to partially refinance the Group’s €750m Euro-denominated bond (c.$880m) due 20 May 2021.

    “The balance of the Euro-denominated bond will be repaid with existing Group cash to reduce gross debt and associated interest costs. The new loan facility further strengthens the core liquidity of the Group.”

    READ: Airtel Africa Plc records 3.8% decline in 2020 9M pre-tax profit

    Repayment of the loan

    The Group Company Secretary explained that the Telco has prepayment flexibilities that will allow the Group to optimise the efficiency of its capital structure with the free cash flows and cash receipts anticipated over the next 12 months following the recent announcements related to tower sales and mobile money minority investments.

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    Companies

    Unilever earmarks N62 million as remuneration to its Non-Executive Directors in 2021

    Unilever Nigeria has fixed its remuneration to the Non-executive Directors of the company in 2021 at N62 million.

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    Unilever Overseas increases stake in Unilever Nigeria Plc
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    One of Nigeria’s leading FMCG companies, Unilever Nigeria Plc, is set to pay out a total of N62 million as remuneration to its Non-Executive Directors for the year ended December 31, 2021.

    This disclosure was made by the leading consumer goods company as one of the key resolutions that would be considered and passed at the Company’s ninety-sixth (96th) Annual General Meeting, which will hold on Thursday 6 May 2021 at 10.00 am.

    The famed manufacturer of Sunlight detergent also revealed that in addition to the N62 million remuneration, sitting allowances will be paid at standard agreed rates for each meeting attended and the Chairman of the company will be entitled to a vehicle allowance of N12 million gross per annum.

    READ: Heavy sell-off in PZ & Unilever shares leads to N6.09 billion market value loss

    Short-term benefits paid by Unilever in 2020 to its Directors

    Despite the fact that Unilever Nigeria Plc has not paid its shareholders dividends for about two years now, the FMCG company paid out short-term benefits of about N511 million and N73 million to its Executive and Non-Executive Directors in 2020 respectively, compared to a sum of N590 million and N59 million it paid out in 2019 respectively. The members of the leadership team, excluding the Executive Directors of the company, were paid a total of N867 million short term benefits in 2020, down from the N1.04 billion they received in 2019.

    On the flip side, the total payout as wages and salaries to the company’s employee in 2020 was N5.05 billion, this is down from the N5.99 billion which the company paid out in 2019.

    READ: Abdulsamad Rabiu set to earn N39.4 billion from his cement business

    In case you missed it

    According to a recent result by Unilever Nigeria Plc, the company made a loss of about N492 million in the first quarter of 2021. This figure is 144.1% lower when compared to the profit of N1.114 billion made by the company in the corresponding quarter of 2020.

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    Unilever’s revenue however surged by 45.7% during the quarter. However, the growth in the cost of sales, and the huge 63.3% increase in marketing and administrative expenses pressured the profits down to a loss of N492 million in the first quarter of 2021.

    SSKOHN

    READ: Guinness shares surge by 9.89%, lifting the brewer’s capitalization by N5.9 billion

    What you should know

    • Shares of Unilever Nigeria Plc are currently valued at N12.95 per share, placing the YTD loss in the shares of the company at -6.83%.
    • Unilever Nigeria Plc is the sixth most valuable consumer goods company listed on the Nigerian Stock Exchange, with a robust market valuation put at N74.4 billion, higher than Guinness Nigeria Plc, NASCON Allied Industries Plc and PZ Cussons.
    • The shares of the top FMCG brand is trading 23.8% lower than its 52-week high price of N17, and 23.3% higher than its 52 week low of N10.5.

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