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.
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.
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.
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.”
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.”
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.
“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.
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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.
“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.”
Flour Mills moves to diversify funding sources with N29.8 billion bond listing
Flour Mills Nigeria Plc lists N29.8 billion bonds to diversify funding sources from the Nigerian capital market.
Flour Mills Nigeria Plc’s fresh N29.8 bond listing will help the nation’s leading food business company to explore diversified funding sources from the Nigerian capital market, with the hope of enhancing growth and the development of the company.
This statement was made by the Group Managing Director of FMN, Mr. Omoboyede Olusanya, at the listing of the Tranche A and Tranche B bonds valued at N29.8 billion on the Nigerian Stock Exchange (NSE).
The food and the agro-allied company which has remained Nigeria’s largest and oldest integrated agro-allied business with a broad profile and robust Pan-Africa distribution issued these bonds under its N70 billion Bond Issuance Programme.
Olusanya said that the company would continue to explore funding opportunities inherent in the capital market to ensure business growth and continuity.
While speaking about the Credit Rating of the Programme, he disclosed that FMN’s credit rating, as well as the operational financing of the Group, have improved considerably.
According to him, the bonds floated by Flour Mill will help to strengthen the company’s capital base and provide the needed working capital required by the Company. He added that Flour Mills Group will continue to deleverage and replace short term financing with longer-tenured and lower price funding to optimize capital structure and reduce financing cost.
He noted that Flour Mills will continue to explore opportunities to raise fundings via the capital market as this enables the company to diversify its funding sources and continue to play a role in the capital market as a significant player in it.
What they are saying
The Group Managing Director of FMN, Mr. Omoboyede Olusanya, at the virtual event, said;
- “We are delighted with the response from the market, we are happy to be listed.
- “We are introducing an N29.9 billion listing under an N70 billion bond issuance cover; we will continue to raise funding to diversify our funding sources.
- “The company remains passionate about feeding the nation to improve the quality of living for Nigerians through increased production and investments in backward integration.”
What you should know
- With the successful issuance of the new N29.8bn Tranche A and Bonds, FMN has utilized its bond issuance program registered in 2018.
- It is important to note that the Senior Unsecured bond listing includes an N4.89bn under Series 4 Tranche A of the bond issuance programme, at a 5.5% rate for 5 years, due by 2025, and a 25bn under Series 4 Tranche B of the same program at a 6.25% rate for a tenure of 7 years, due by 2027.
- The bond proceeds will be used to refinance existing debt obligations. It will also help the company take collaborative actions to diversify the company’s financing options beyond expensive short term debt.
Lafarge moves to divest 35% shareholding in CBI Ghana
Lafarge Africa Plc has resolved to sell off its 35% shareholding in Continental Blue Investment Ghana Limited.
The Board of Lafarge Africa Plc has resolved to sell off its 35% shareholding in Continental Blue Investment Ghana Limited, in order to cut down on costs impacting the Group’s profit.
This disclosure was made in a notification tagged- “Notice of Divestment in Continental Blue Investment Ghana Limited”, which was issued by the Company Secretary, Mrs. Adewunmi Alode.
According to the statement, the Board of Directors of the Group made the decision to divest its 35% shareholding in Continental Blue Investment Ghana Limited (“CBI Ghana”), in line with the resolutions made at the emergency board meeting which held yesterday 20th, January 2020.
This move was made to set off the cement manufacturer on the path of sustainable growth and profitability, as Lafarge’s investment in CBI Ghana has depleted significantly over the years.
What you should know
- This is not the first time the company has had to sell off an unproductive investment in an effort to cut down on deadweight cost, as key players in the Cement industry like BUA and Dangote Cement continue to show strength and resilience through their effective cost minimization strategy which worked well in 2020.
- Recall that in August 2019, Lafarge Africa sold off all its stakes in Lafarge South Africa Holdings (LSAH). This move helped the company to cut down costs coming from its South African subsidiary, which had been making billions of naira worth of losses for years.
Multiverse forecasts N39.5 million profit in Q1 2021
The management of Multiverse Plc has projected a revenue of N76 million and a profit of N39.5 million in Q1 2021.
Multiverse Mining and Exploration Plc has projected that in the first quarter of 2021, the mining and exploration company will generate N76 million in revenue, and post a profit of N39.5 million.
These projections were made by the company in a recent earnings forecast issued by the Management, and signed by the Corporate Secretaries of the company.
Key highlights of the earnings forecast for Q1 2021
- Total revenue is projected at N76 million.
- Turnover from agency sale is projected at N1 million.
- Agency cost is s projected at N850 thousand.
- Total expenses are projected at N7.8 million.
- Operating Profit is projected at N67.3 million.
- EBIT (Earnings Before Interest and Taxation) is projected at N67.3 million.
- Interest Expense is projected at N27.8 million.
- Profit after tax is projected at N39.5 million.
Key assumptions made to support the earnings forecast and projection of the company
The earnings forecast was made on the ground that there won’t be any significant change in the economic policies of the Federal Government, while the monetary policies of the CBN would not be altered significantly.
The company also maintained that there would not be any industrial unrest that would affect its production and sales volume, while the profit of the company would not be pressured by rising costs of inputs, as prices of materials used in production shall be stable in the period under review.