The 34.5% decline in the daily sufficiency of aviation jet fuel may constitute a worry for airline companies in the country.

Considering that there is usually more people traveling due to the traditional Christmas and New Year festivities, resulting in increased flight patronage, the current total stock level appears to be low.

The observation is according to the daily petroleum products days sufficiency (total stock level data) compiled by the Petroleum Products Pricing Regulatory Agency (PPPRA).

In line with the data available on the PPPRA website,

• The current total stock level of Aviation Turbine Kerosene (ATK), also known as aviation jet fuel or Jet-A1, stands at 89.04 million litres.
• Eleven days earlier, the total stock level was 135.83 million litres – indicating a 34.5% decline.
• Before now and since the start of the 2020, total stock level has been relatively unstable, with the recent highest total stock level of 187.40 million litres recorded on the 2nd of October 2020 – indicating about 60 days sufficiency; and the lowest 54.96 million litres was recorded on the 17th of July – about 18 days sufficiency.
• As at the time the latest report was released, 27th November 2020, the total ATK stock was land-based stock.
• Checks indicate there has been no receipt of ATK from the 19th of November, after the last receipt of 5.56 million litres on the 18th of November.

What they are saying

Speaking to Nairametrics regarding the decline, the MD/CEO of Jushad Oil and Gas Ltd, Mr. Bosun Paseda, submitted that the decline is due to the continuous increase in the exchange rate.

He said, “The exchange rate is very high and unstable. You will discover that importers do not have access to the CBN rate and have to make recourse to the parallel market. The landing cost is currently higher than the rate we sell at the airport. That’s why marketers do not want to bring the product.

“Scarcity is likely to set in, but the reason there is no scarcity yet is because people are not really flying. If it stays the same, then scarcity may set in, when travel increases.”

Responding to the question on whether the decline in stock has affected the price of the product, Mr Paseda noted that it has not really affected the price of the product as consumption is currently low.

What you should know

Nairametrics recently reported that oil markets yearned for airlines to resume operations following several months of not operating due to the Covid-19 pandemic travel restrictions.

• Aside from the loss of revenues to airline companies, the call was necessary considering that Jet fuel demand averages about 8 million barrels per day worldwide – indicating that oil companies were also not recording enough revenues.
• As a result of the pandemic, the International Energy Agency expects demand for Jet fuel and Kerosene to fall by 2.1 million bpd on average in 2020. This has, however, improved following lifting of travel restrictions in many countries.

Now that flights have resumed operations, it appears airline companies in the country may be in line to face another hurdle before the year runs out. The likelihood of facing this hurdle is highly contingent on receipt of ATK used in powering flights and increased travels. If things remain the same in terms of daily sufficiency of ATK needed to power their flights, scarcity may set in.

• Remember that the lowest ATK of 54.96 million litres – about 18 days sufficiency, recorded on the 17th of July, was during travel restrictions. The decline in that period didn’t create concerns and it picked up days later.

What this means

• With the national average daily consumption of ATK three million litres, this depicts that current total stock level of 89.04 million litres will only sustain for about 30 days, all things being equal.
• Even though it appears this stock level is good, the steady decline in the stock level as illustrated in the graph above raises immediate concerns.
• Also, one may conclude that receipt of ATK has stalled in recent days, having received only a total of 12.68 million litres in the last two weeks, since 12th November. This observation appears to denote that should the product receipt trend continue, scarcity may occur in the near future.

Operators in the Nigerian hospitality industry have created opportunities for themselves amid the Covid-19 pandemic, in order to redefine value propositions and keep their heads above water.

To survive the negative impacts and ensure that they give their patrons reasons to continue patronizing their services, some of these hotels came up with initiatives like drive-in events, outdoor events, promotions, guest engagements, and group conference events, amongst others.

Transcorp Hotels

During its Q3 2020 Investors Call, the Managing Director of Transcorp Hotels, Dupe Olusola, told Nairametrics that though the revenue of the hotel, dropped by 54% year-on-year due to the lingering negative impact of Covid-19; Through the various initiatives implemented to reduce the impact of the pandemic, over 237% increase was recorded in Q3 revenue compared to that of Q2.

She said, “Drive-In Events product, launched in May, is for ‘top of mind’ awareness for the hotel amongst our targeted audience. It has also driven sales in the restaurant and other business areas within the hotel.

“Continuous promotion of our meetings, simplified product offerings like the Weekend Staycation, Work-From-Hotel package, amongst other initiatives, and have increased leisure business at the hotel.

“With the launch of EventReady and the CleanStay program, we have seen an increase in meetings.”

She added that the hotel had witnessed improvement in room revenue, majorly driven by the transient and group segments, as well as its continuous marketing campaign of hotel offerings.

(READ MORE: As Hotels resume operations, how prepared are they?)

She said, “Our Weekend Staycation is to attract both Abuja residents and potential guests from other states, in order to drive local and leisure demands.”

Ikeja Hotels Plc

Ikeja Hotels Plc also adopted some initiatives across its hotel chain to survive the pandemic. A staff of Sheraton Hotel Ikeja, who preferred anonymity, as she was not permitted to discuss on behalf of the hotel, told Nairametrics that the hotel had adopted some initiatives like outdoor events and promotions to attract more patrons.

She said, “As part of our strategy to improve operational efficiencies, we have put in place cost-cutting and recovery measures, including negotiating vendor contracts, energy conservation, and optimizing our workforce to the required manning at different occupancy levels.

“Our Food and beverage revenue has improved, driven mainly by the conference and event businesses. We recorded a week on week increase in the month of October.”

(READ MORE:COVID-19: Hotels.ng partners others to provide self-isolation centres for Nigerians)

L’eola Hotel

In the case of L’eola Hotel, formerly known as Protea Hotel, surviving the challenges created by the pandemic is key and this made the hotel to introduce some initiatives.

In an interview with Nairametrics, its Deputy General Manager, Tunde Oduyoye, explained that the hotel had to invest more on social media tools to reach out to its clients and also to meet the needs of some patrons, who wanted to hold social gatherings despite the social distancing rule.

He said, “We just did a photoshoot, which we shared with our existing and potential clients via our social media tools, to remind our patrons that we are back and fully compliant with the Covid-19 protocols.

“We now host weddings and other occasions and Zoom to other guests that cannot attend physically due to social distancing rules. We also host occasions on our open field to guarantee the safety of our patrons.

“We deliver food to our clients and also engage Jumia for deliveries. The hotel has also started baking bread for lodging guests and others within and outside the community.”

(READ MORE:Experts wary of profit-taking, but remain bullish long term on Nigerian Stocks)

Radisson Blu Anchorage Hotel

Like other hotels earlier mentioned, Radisson Blu also adopted several measures to remain relevant to its patrons.

In an interview with Nairametrics, a source at the Hotel, who preferred anonymity, as he was not permitted to speak on behalf of the hotel, disclosed that it had adopted an outdoor catering service for both corporate clients and individuals.

He said, “Continuous promotion of our product offerings and other initiatives, has boosted patronage in our hotel. We now offer outdoor events and new discount rates for using our facilities. With this development, we have seen an increase in meetings at the hotel, compared with when the lockdown was eased few months back.”

What the future holds

Hotels in Kenya, Egypt, and South Africa rely on local tourism to drive occupancy rates. In contrast, locals in Nigeria prefer smaller mushroom hotels that are cheaper and often well-furnished to meet their needs, especially the short-stay apartments.

Hence, hotels in Nigeria rely on commercial room sales, driven by the influx of business and leisure travels into the country.

With several airlines yet to be fully operational due to reciprocal bans and lockdowns in some countries, it is highly unlikely that things will improve anytime soon.

(READ MORE: FG reopens the financial sector, hotels as bars and nightclubs remain closed)

What you should know

The lockdown effect on the revenue of these hotels is reflected in the 2020 Q2 results of the main listed hotels.

According to the data, Ikeja Hotels (Sheraton), Tourist Company of Nigeria (Federal Palace), Capital Hotels (Abuja Sheraton), and Transcorp Hilton Hotel Plc all lost 90% of their revenue in the three months preceding June 2020.

• The hotels earned a combined revenue of N1 billion in the quarter, compared to N10.2 billion in the corresponding period of 2019.
• They lost over N4.7 billion for the quarter alone.
• Combined, they had about 3,502 employees as of 2019.

The Indian High Commission in Nigeria has facilitated Delhi-Lagos-Delhi air bubble flight on Sunday, November 29, 2020.

India created an air bubble arrangement with Nigeria in September 2020.

This was disclosed by the High Commission via its Twitter handle on Sunday.

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It explained that the “Transport Bubbles” or “Air Travel Arrangements” are temporary arrangements between the two countries aimed at restarting commercial passenger services when regular international flights are suspended as a result of the COVID-19 pandemic. They are reciprocal in nature, meaning airlines from both countries enjoy similar benefits.

It tweeted, “Glad to have facilitated travel in Delhi-Lagos-Delhi air bubble flight @airindiain 1903/04 on 28/29 Nov. Thank all the concerned 🇮🇳 & 🇳🇬 authorities for their continuous support.”

READ: UK High Commission in Nigeria to replace expired visa for free, as it restarts operations

Glad to have facilitated ✈️ travel in Delhi-Lagos-Delhi air bubble flight @airindiain 1903/04 on 28/29 Nov. Thank all the concerned 🇮🇳 & 🇳🇬 authorities for their continuous support.@PMOIndia @MEAIndia pic.twitter.com/AaQwvr0tAf

— India in Nigeria (and Benin, Chad & ECOWAS) (@india_nigeria) November 29, 2020

READ: Airline operators cry out over FG’s non-implementation of VAT removal

What you need to know

India’s Ministry of Civil Aviation (MoCA), via its official website, had announced on September 17, 2020 that it established an air travel bubble with Nigeria.

What it means

Indian and Nigerian carriers are now permitted to operate flights between India and Nigeria and carry the following categories of persons on such flights:

A. From India to Nigeria:

i. Stranded Nigerian nationals/residents, foreign nationals destined for Africa and transiting through Nigeria or spouses of these persons, whether accompanying or otherwise;

ii. Any Indian national holding any type of valid Nigerian visa and destined for any country in Africa. It would be for the airlines concerned to ensure that there is no travel restriction for Indian nationals to enter the destination country before issue of ticket/ boarding pass to the Indian passenger; and

iii. Seamen of foreign nationalities; Seamen holding Indian passports would be allowed subject to clearance from the Ministry of Shipping.

READ: UK issues new travel advice for foreign students, can work for 3 years after graduating

Click here for the details of the air buble arrangement