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COVID-19 Update in Nigeria
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Hospitality & Travel
FG to announce new flight resumption date next week, test runs 2 airports
FG hopes to announce the date for resumption of domestic flight operations by next week.
The Federal Government has announced plans to carry out a test run of the Nnamdi Azikiwe International Airport in Abuja and the Murtala Muhammed Airport, Lagos on Saturday this week.
The test run of the facilities in the 2 airports is to determine their readiness for the resumption of domestic flight operations.
According to a tweet post by the aide to the President on New Media, Tolu Ogunlesi, this was disclosed by the Director-General of the Nigerian Civil Aviation Authority (NCAA), Captain Musa Nuhu, at the daily briefing of the Presidential Task Force on COVID-19.
In his briefing, the NCAA boss, also said that the Federal Government, hoped to announce the date for resumption of domestic flight operations by next week.
READ ALSO: Nigeria’s ratings risk downgrade over rising debt and lower revenue
According to the tweet post, “Dry Run tests of Lagos and Abuja Airports will be coming up this Saturday. Hopefully, sometime next week, we will be able to announce a restart date for domestic flights.”
He also said, “Significant progress has been made regarding readiness to restart domestic aviation industry. A few gaps remaining which will be closed hopefully in next couple of days. We have to get it right both in technical safety and health safety.”
Nuhu also noted that after the dry run tests, the FG would identify the gaps that might be there and close them. After that, the date for resumption of domestic flight operations by next week would be announced.
The airports had been closed to both domestic and international flight operations since March as part of measures by the government to contain the spread of the coronavirus pandemic.
READ ALSO: Nigeria’s tier-1 banks pay N29.8 billion worth of taxes in Q1 2020
Nairametrics, last week, reported the suspension of the resumption of domestic flight operations by the Federal Government. The Government said that the initially announced date of June 21, 2020, was no longer feasible as they did not feel that the industry was ready.
The NCAA said they would submit a report to through the Aviation Minister to the Presidential Task Force (PTF) on COVID-19, advising on a possible date for resumption.
DG @NigerianCAA: ‘Dry Run’ tests of Lagos and Abuja Airports will be coming up this Saturday. Hopefully sometime next week we will be able to announce a restart date for domestic flights. #PTFCOVID19
— tolu ogunlesi (@toluogunlesi) June 25, 2020
DG @NigerianCAA: Significant progress has been made regarding readiness to restart domestic aviation industry. A few gaps remaining, which will be closed hopefully in next couple of days. We have to get it right both in technical safety and health safety. #PTFCOVID19
— tolu ogunlesi (@toluogunlesi) June 25, 2020
Hospitality & Travel
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Hospitality & Travel
Air Passengers to United States must test negative for Covid-19 before boarding flight
The United States Government wants all international passengers must provide a negative Covid-19 test before they board a flight into the country.
The United States Government wants all international passengers to provide a negative Covid-19 test before they board a flight into the country. This is according to a report from the Wall Street Journal and confirmed by the Centers for Disease Control Prevention in the US.
The new rule will also affect United States citizens in the country.
According to the U.S. Centers for Disease Control Prevention (CDC) “Before departure to the United States, a required test, combined with the CDC recommendations to get tested again 3-5 days after arrival and stay home for 7 days post-travel, will help slow the spread of COVID-19 within US communities from travel-related infections. Pre-departure testing with results known and acted upon before travel begins will help identify infected travelers before they board airplanes.”
Based on this, all Air Passengers are required to conduct a test within 3 days before their flight to the US. departs.
“Air passengers are required to get a viral test (a test for current infection) within the 3 days before their flight to the U.S. departs, and provide written documentation of their laboratory test result (paper or electronic copy) to the airline or provide documentation of having recovered from COVID-19. Airlines must confirm the negative test result for all passengers or documentation of recovery before they board. If a passenger does not provide documentation of a negative test or recovery or chooses not to take a test, the airline must deny boarding to the passenger.”
The order was signed by the CDC Director on January 12, 2021, and will become effective on January 26, 2021.
Last week the US imposed a testing requirement for travelers from the United Kingdom over cases of a new strain of the virus which has also been reported in the US.
What this means: New travel requirements for the negative Covid-19 test will negatively affect the global aviation sector which attracts over 340 million arrivals annually according to 2019 data seen by Nairametrics.
- For third-world countries like Nigeria, travellers into the US will need to conduct the Covid-19 test before they depart from the United States piling pressure on testing centers across the country.
- Though a requirement that most Nigerians are already familiar with, there will likely be pressure to avoid testing positive a few days before departure to the US.
- Nigerians who travelled to Dubai during the Christmas holiday were also required to undertake covid-19 tests
- Nigeria also requires visitors into the country to take the Covid-19 test before departing for Nigeria.
The global Covid-19 caseloads topped 90 million with the United States leading the pack with 22.7 million cases and over 379,000 deaths
Just last week, the United Kingdom said that all passengers arriving in the country will be required to show negative Covid-19 test results taken within 72 hours of the commencement of their journey to prove they do not have the disease. Ireland also announced new travel rules which require visitors into the country to provide evidence of a negative Covid-19 test taken within 72 hours before arriving in the country.
Going further, the United Kingdom said on Thursday that it would extend a ban to international passengers from Southern African countries coming into the country, as part of the measures aimed at preventing the spread of a new strain of Covid-19 variant identified in South Africa.
Nigeria also requires travellers into the country to carry out a second Covid-19 test after arrival into the country or face consequences. Last week the Nigerian immigration service announced the suspension of 100 passports belonging to Nigerian passengers who refused to undergo second Covid-19 tests within 7 days of arrival into Nigeria from overseas travel.
This article was updated following new information.
Exclusives
Nigerian Aviation: Exchange rate, 7.5% VAT suspension and other factors to determine survival – Experts
Stakeholders share their expectations and factors that must be addressed by the FG to aid the rebound of the sector in 2021.
The aviation sector suffered setbacks due to the emergence of the COVID-19 pandemic in 2020, as the lockdown effected by many countries led to travel restrictions, reduced revenue and mass loss of jobs.
In the case of Nigeria, operators in the sector felt the impact of the pandemic more than their counterparts, as ‘old illness’ suffered by the airlines was exacerbated by the pandemic and left the operators writhing in pains.
READ: COVID-19: Over 70% of jobs lost in aviation, tourism industries in 2020 – AfDB
For the sector to survive in 2021 – in the heat of the second wave of the pandemic, stakeholders shared their expectations and factors that must be addressed by the federal government to aid the rebound of the sector.
They listed stable exchange rate, reduction of cost of operations, waivers on Customs tariffs for aircraft and spares and cost of aircraft insurance, a reversal of 25% remittance of earnings, amongst others.
READ: Nigeria owes foreign airlines $53 million as proceeds from ticket sales – IATA
Unstable exchange rate
In an interview with Nairametrics, the Managing Director, Aero Mainstream Cargo Services, Ajibade Adewale, explained that the unstable exchange rate, especially for aviation stakeholders, has been a clog in the wheel of operations of the airlines, and most of them cannot afford to inflate their charges in line with the unstable rate.
READ: FG bars aides of VIPs from airport terminals, to grant loans to airlines, others at 5%
He said,
“Operations of the airlines are largely dollar-denominated. Operations like aircraft purchase plus maintenance and training of staff amongst others can only be done in dollars. The only thing they do in local currency would be salaries.
“Either airlines are allowed to access stable rates or the federal government creates an enabling environment for aircrafts maintenance or repairs here.
READ: Nigeria @ 60: The Aviation sector and its travails
“The rubber industry should be revived for investors to set up tyre manufacturing factories in Nigeria, in order to stop importing aircrafts tyres from other parts of the world. Most of the aircraft tyres are manufactured and imported from the United Kingdom (Dunlop), France (Michelin), United States of America (Goodyear), and Bridgestone (Japan).”
He insisted that if enabling environment is created by the government, some of these companies will return to Nigeria and this will reduce cost of maintenance for the airlines.
READ: COVID-19: Travel agencies beg FG for interest-free loans
Lack of skills to execute right policies
On creating an enabling environment, especially for maintenance factory, Capt. David Olubadewo, Managing Director, Starburst Aviation Limited and a Nigerian based in UK, explained that aviation in Nigeria is a very difficult business because the environment is unfriendly.
He said,
“Aside from the role of the government, the industry has always been given a bad name in that light. It is not that we don’t have the people to fix it, but there are different aspects that have been compounded over the years. That is why we are where we are today.
READ: Nigeria generates N424.71 billion VAT in Q3 2020
“We have lots of very qualified people, there are lots of engineers in the United Kingdom and the United States who are Nigerians. We have people that are overqualified, but we lack the skills to execute the right policies to grow the sector.”
Cheaper loans
Olubadewo explained that most of the airlines and other industry stakeholders could not access cheaper loans because banks believe that the sector is too difficult to invest in.
“But that is wrong. It is not different from other sectors. We are all in it to make profit at the end of the day. I don’t obtain loans from Nigerian banks, because I will end up with -25% loss or more, but that is not happening in the UK where I pay far less interest rate.
READ: VAT collection edges higher but indicates weaker economy
“If I take such loan in Nigeria, it means I am -28 per cent (interest rate) in red, and by the time you get to the top, you are owing millions. I cannot approach any of the banks to give me local money to do business in Nigeria. If I can go through that, you can imagine the experiences of the airlines.”
Suspension of 7.5% VAT
Recently, a member of the finance bill drafting committee and West Africa Tax Lead, PwC Nigeria, Taiwo Oyedele, disclosed via a tweet, that the federal government has again suspended the deduction of 7.5% Value Added Tax (VAT) on airfares and other air transport services.
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According to him, the latest suspension order was scheduled to take effect on January 1, 2021, as it is contained in the 2020 finance act recently signed by President Muhammadu Buhari. Operators in the aviation sector are convinced that its implementation would ease the burden on them in 2021.
Effective 1st Jan 2021, commercial flight tickets have been exempted from VAT.
Next time you fly, cross check that you're not wrongly charged VAT (and hopefully air fares should come down). #FinanceAct2020
— Taiwo Oyedele (@taiwoyedele) January 5, 2021
Media and Communications Manager, Dana Air, Kingsley Ezenwa, explained that his airline would be excited to plow back the proceeds of VAT removal to the business and ticket fares subsidy.
READ: COViD-19: Nigerian Railway Corporation to shut operations
He said,
“But that may not happen soon, the expected gains are subject to the actual implementation of the policy and the review of other multiple charges in the aviation industry.”
READ: COVID-19: The ‘New Normal’ for Nigerian aviation industry
What you should know
- The FG in June 2018 issued an executive order on the suspension of VAT in air transport, but the Federal Inland Revenue Service (FIRS) claimed to be unaware of such a directive, hence it was never implemented.
- Airline operators had complained that Nigeria is the only country that still charges VAT on air transport services. The VAT plus 36 other charges, according to the airlines, account for at least 40% of total revenue and N10 billion in taxes yearly, leaving the airlines heavily indebted and in financial distress or both in most cases.
