Hospitality & Travel
Global air passenger slump to persist till 2023 – Moody’s
Global air travel declined from 55%-75% in 2020 alone, which will heavily affect the industry.
American credit rating and market research firm, Moody’s has stated that the drop witnessed in the numbers of air passengers won’t reach pre-COVID-19 pandemic levels until 2023.
The report was disclosed in Moody’s Global airline disruption report published on their website.
Moody’s estimates that global air travel declined from 55%-75% in 2020 alone, which will heavily affect the industry as aviation supports $2.7 trillion of global GDP, and 70 million industry-supported employment which they forecast a 45% decline.
The pandemic affected air travel and led to job cuts and furloughs in the industry, a 45% decline in jobs related to the industry would have a negative effect in tax revenues for countries.
Moody’s predicts that the aviation manufacturers like Boeing and Airbus the last to recover as airlines and airports will post recoveries first, which will be followed by aviation equipment lessors as carriers would become operational.
Two months ago, Nairametrics had reported that for the first time in world history, at the peak of COVID-19, about 90% of the world’s citizens were restricted from traveling, either to return home or to destinations of choice. Without a doubt, the most affected in travel & tourism is the aviation industry.
(READ MORE: Update: FG announces new dates for domestic flight operations)
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.
Meanwhile, the report said global demand dropped as much as 90% during the first weeks on the pandemic, and vaccine would be catalyst to get the industry going adding that bailouts would be needed by the airlines from the government.
“With an effective coronavirus vaccine likely not available before well into 2021 – and likely longer to cover potential mutations of the virus and to ensure adequate dosage supply for the masses – additional government support will be required for the airline industry if employment levels are to be maintained near already reduced levels, and potentially to stave off additional airline restructurings and insolvency proceedings,” Moody’s said.
The airline industry will heavily bank on a vaccine to help its recovery and get it back to pre-coronavirus levels of operation.
For aircraft manufacturers, Moody forecasted a 50% decline in deliveries and expects recovery from 2024. Aircraft leasing is expected to see 80% in rent deferral requests while airports will see a decline in passengers by 2.2 billion until the recovery.
Hospitality & Travel
Arik, Dana Airlines to resume flight operations after curfew
Dana Air and Arik airlines to resume flight operations from Lagos airport tomorrow.
Dana Air and Arik airlines are set to resume flight operations from Lagos airport on Saturday, as the Lagos State government relaxed the 72-hour curfew imposed on the state.
The curfew was imposed by the State Governor, Mr Babajide Sanwo-Olu, on Tuesday to forestall further breakdown of law and order, following series of EndSARS protests.
READ: SAHCO, Arik Air renew contract to boost services
Communications Manager, Arik Air, Adebanji Ola, in a statement issued on Friday, explained that flights across the country would operate as scheduled, and passengers were advised to arrive at the airport early to have ample time to complete boarding formalities.
He said, “Customers who could not use their tickets during the period of the curfew can modify such tickets at no extra cost.
READ: Local Airlines tell staff to forget April salary
“The management of Arik Air thanks customers for their understanding while the cancellation of flights lasted.”
Also, spokesperson for Dana Air, Mr Kingsley Ezenwa announced that the airline was pleased to inform its passengers that the company would resume full flight operations from Saturday, the 24th of October 2020.
READ: Chinese automobile maker, GAC Motors to set up assembly plant in Lagos
He said, “The tickets purchased for flights within the period of the curfew remains valid and can be rescheduled for free by sending an email to us.”
Back story: Nairametrics reported earlier on Friday that the Lagos State Government had eased the 72-hour curfew which was earlier imposed on Tuesday, October 2020, to run from 6 pm to 8 am.
READ: Lagos to support owners of looted, vandalised stores
This was disclosed by Governor Babajide Sanwo-Olu, on Friday, October 23, during a press briefing at State House Marina, after a tour of the state to inspect the level of destruction of public and private infrastructure during the #EndSARS protests that later turned violent.
This means residents can go out between 8 am and 6 pm, with effect from Saturday, October 24, 2020).
Hospitality & Travel
Nigeria set to lose on latest Bilateral Air Service Agreements
Experts have explained why Nigeria is at the losing end of yet another Bilateral Air Space Agreement.
It is no longer news that Nigeria signed Bilateral Air Service Agreements (BASA) with the United States, India, Morocco and Rwanda. However, who benefits more from the agreements has been a topical discussion amongst Nigerian stakeholders. Some of them, who spoke with Nairametrics in separate interviews, argued that the development would favour the partner countries more than Nigeria.
They argued that Nigeria has signed this deal with over 80 countries across the world, but has turned out to be disadvantageous to Nigeria. Most of the agreements are only beneficial to the countries and their foreign carriers, without any reciprocal benefits to Nigeria. This is allegedly due to the failure of the Nigerian representatives to put Nigeria’s interest first at the BASA negotiating table.
READ: CBN to sanction exporters who default on export proceed number
In most cases, Nigeria does not really benefit from the deal, especially with no National carrier or a domestic airline that has the required equipment to compete with their foreign counterparts.
Managing Director, Starburst Aviation Limited, Capt. David Olubadewo, who was once Nigeria’s youngest pilot, admitted that he has not seen the agreements. However, he told Nairametrics that the nation does not have the capacity/equipment to compete favourably with the countries it signed the deal with.
READ: FG to inject over N198 billion on capital projects in power sector in 2021
Capt. Olubadewo said, “In most cases, BASA entails specific agreement between two partners, where parties involved will agree on exchange of flights. It could be 10 flights weekly from Country A and same from the other Country.
“So, if US for instance, has done 10 flights to Nigeria as agreed and Nigeria has not, it will not affect US in anyway.”
In his own case, Muyiwa Lucas, another stakeholder in the industry, claimed that the aim of the international carriers and their countries is to make sure that indigenous carriers do not rise to compete with them on those lucrative routes like Lagos-London, Abuja-London, Lagos-Dubai, Lagos-Paris, Lagos-Amsterdam, and Lagos-Johannesburg.
READ: Nigeria, India to conclude Bilateral Air Services Agreement deal
In an interview with Nairametrics, he said that the partners are always quick to choose a favourable destination in Nigeria (Lagos and Abuja), while they dictate to Nigeria the airport to land its aircrafts in their countries.
Lucas said, “Nigerian flights are only allowed to drop passengers at Gatwick, which handled 46.1 million passengers in 2018. They don’t allow such in Heathrow airport, which is London’s main hub and also one of the world’s busiest airports with 80.1 million passengers in 2018.
“Arik Air was stopped from operating from Abuja to London, unless it paid for slot allocation, which cost a huge amount of money.
READ: Nigeria, Ethiopia sign visa waiver agreement
“But, while British Airways was and is still flying to Abuja, enjoying grandfather rights; Arik Air was paying for slots and when the Nigerian airline deemed that operation unprofitable, it stopped, leaving only British Airways to be operating to Abuja from London with minimum load factor of 85%.”
Lucas argued that while some of the countries introduced clauses to jeopardise Nigerian airlines operation to their countries, Nigeria rarely retaliated in the spirit of diplomatic principle of reciprocity.
READ: Just in: FG bars Air France, KLM and other foreign airlines
However, Pranjal Pande, an Indian Aviation Expert, sees the development from a different angle.
According to him, Nigeria is home to a substantial Indian expatriate population, and India sees thousands of yearly visitors from Nigeria but noted that the lack of direct flights has meant passengers fly mostly with Middle East carriers.
Pande said, “Popular routes from Delhi and Mumbai to Lagos are over 4,100 nautical miles, putting them out of the range of the current generation of narrowbody aircraft. This means that, from India, only Vistara and Air India, the only airlines with widebodies, could start flights to Nigeria. Neither airline has signalled intentions of doing so soon.
READ: Nigeria @ 60: The Aviation sector and its travails
“It’s most likely that Air Peace will be the first to start flights to India. However, the timing remains up in the air due to the current crisis.”
Backstory: On October 6, 2020, Nairametrics reported that the Federal Government announced the signing of Bilateral Air Service Agreements (BASA) with the United States, India, Morocco and Rwanda.
A copy of the agreement showed that it was signed in Abuja by President Muhammadu Buhari on September 30, 2020.
I am glad to announce that Mr President, on behalf of Nigeria, has signed the instruments of ratification of the bilateral air service agreement between Nigeria and USA, India, Morocco as well as Rwanda. 🇳🇬🇳🇬 🇲🇦🇷🇼🇺🇸🇮🇳🇳🇬🇳🇬🤝🤝🤝 pic.twitter.com/UHFx0VbqLW
— Hadi Sirika (@hadisirika) October 6, 2020
The disclosure was made by the Minister for Aviation, Hadi Sirika, through a tweet on his official Twitter handle on Tuesday, October 6, 2020.
What they are saying
The Minister said, “The agreement is the instruments of ratification of the bilateral air service agreement between Nigeria and USA, India, Morocco, as well as Rwanda.”
He added that Nigeria will take advantage of the agreement to strengthen economic, social and cultural ties with the US.
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Hospitality & Travel
Transport fare for motorcycle “Okada” more than doubled in 2020
Data from the NBS reveals the average fare paid by commuters for a journey by motorcycle more than doubled year on year.
Data from the National Bureau of Statistics (NBS) reveals the average fare paid by commuters for a journey by motorcycle per drop more than doubled year on year (September 2020 vs 2019 respectively).
This was contained in the recently released data on Transport fare for September 2020 in Nigeria. This covers bus journey within the city per drop, bus journey intercity, state route, charge per person, airfare charge for specified routes single journey, journey by motorcycle (Okada) per drop, and waterway passenger transport.
READ: Nigeria’s manufacturing sector contracts for 5th consecutive month – CBN
Motorcycle Fares
- According to the report, the average fare paid by commuters for the journey by motorcycle per drop increased by 10.47% MOM and by 111.11% YOY to N255.51 in September 2020 from N231.29 in August 2020.
- The states with the highest journey fare by motorcycle per drop were Niger (N1,467.49), Kogi (N362.47), and Rivers (N345.80); while states with the lowest journey fare by motorcycle per drop were Adamawa (N76.55), Katsina (N100.84), and Kebbi (N125.60).
- Similarly, the average fare paid by commuters for bus journeys within the city increased by 7.92% MOM and by 63.88% YOY to N309.73 in September 2020 from N286.99 in August 2020.
READ: These 3 states are the most expensive to travel from in Nigeria
READ: NBS discloses States with highest bus fares in Nigeria (Full List)
Bus Fares
The states with the highest bus journey fare within the city were Zamfara (N579.84), Bauchi (N492.14), and Cross River (N416.32); while states with the lowest bus journey fare within the city were Abia (N188.50), Kebbi (N192.48), and Borno (N200.80).
- The average fare paid by commuters for bus journey intercity increased by 0.36% MOM and by 24.30% YOY to N2,022.70 in September 2020 from N2,015.50 in August 2020.
- The states with the highest bus journey fare intercity were Abuja FCT (N4,315.22), Lagos (N3,073.25), and Sokoto (N3,000.00); while states with the lowest bus journey fare within the city were Kwara (N223.45), Benue (N274.64), and Ondo (N291.07).
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Air Travel
Average fare paid by air passengers for specified routes single journey decreased by -4.59% MOM and increased by 20.60% YOY to N36,884.59 in September 2020 from N38,659.86 in August 2020.
- The states with the highest airfare were Lagos (N39,750.00), Rivers (N39,520.00), and Anambra (N38,950.00); while states with the lowest airfare were Akwa Ibom (N32,500.00), Sokoto (N33,700.00), and Benue (N35,000.00).
- The average fare paid by passengers for waterway passenger transport increased by 7.06% MOM and by 34.13% YOY to N734.26 in September 2020 from N685.82 in August 2020.
- The states with the highest fare by waterway passenger transport were Bayelsa (N2,250.23), Rivers (N2,200.64), and Delta (N2,150.30); while states with the lowest fare by waterway passenger transport were Borno (N200.48), Gombe (N264.29), and Abuja FCT (N294.10).
READ: Nigeria’s inflation rate hits 13.71% as food prices soar
What this means: According to the NBS, transportation makes up 6.4% of consumption expenditure of millions of naira next only to food at over 50%. Transport is also a key input cost for determining food prices and conducting business in the country contributing to the inflation rate. A combination of bad roads. poor infrastructure, exchange rate devaluation, removal of fuel subsidies, and a general rise in prices of goods and services have impacted transportation costs across the country.
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COVID-19 Update in Nigeria
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