Stakeholders worry over 2015 polls, EU travel bans

FAAN pledges to spearhead cargo development in Nigeria

THE shift in the 2015 general elections and travel bans by some European countries are generating so much concern for aviation operators. This is manifesting in their dwindling fortunes, coupled by the declining oil prices in the international market.

Acting managing director, Nigerian Aviation Handling Company (NAHCO) Aviance Plc, Norbert Bielderman who revealed this at a one day ‘Nigeria Summit’ organised by NAHCO Aviance in Lagos, said 2015 is a crucial year because of the elections and their associated intrigues.

“It’s therefore no surprise that our economy has been badly hit and worsened by the election postponement. There has been travel bans from many European countries and this has negatively impacted on the aviation sector. Nigeria’s foreign reserves is significantly depleted and our national account is in deficit,” he stated.

Bielderman also said that the crash in oil price and consequent impact on the nation’s revenue earnings, exchange rate moving from N155 per Dollar to N205 per Dollar within a six-month period at the interbank and Central Bank of Nigeria’s final closure of the RDAS is a testament to the fact that all is not well with country’s economy.

He observed that the Naira has been devalued to between 30-40 percent and this will necessarily cause inflation if government does not put in place deliberate measures to mitigate against an upsurge in price across the industry, adding ‘We expect inflation to rise up to 10 percent or more soon’.

Speaking further, he said the cost of fund has also significantly risen with bank interest rates now up to about 26 percent which he said will lead to massive job losses within the private sector and for them to survive this trying time.

‘In Aviation, the domestic airlines would be worst hit because of current ticket prices are not responsive to current realities. This is due to unhealthy price wars and pursuit of market dominance at the domestic side of airline business. Domestic air tickets are still significantly low despite increase in airport charges, taxes’ 

‘These domestic carriers still maintain their aircraft in USD and aviation fuel has not significantly been reduced if at all. In our opinion, we suggest that these domestic airlines come together and agree a base rate for air tickets in order not to compromise safety and the regulator would do well to step in and analyze their current book positions and act accordingly. Nigeria cannot afford another air mishap,’ the acting MD said.

Continuing he contended: “The international carriers are more better positioned to survive this challenging time because their ticket price/ rates are USD based and these hedge them from witnessing Naira depreciation although the capacity of the very important middle-class to purchase international travel tickets will reduce. We expect they would save rather than spend in months ahead due to rising cost of living, potential job losses, rising children school fees etc.”

“Also, the travel warning or ban from EU countries for their citizens coming into Nigeria has assured that many flights from Europe to Nigeria have either been flying half empty to near empty. This is also a negative consequence of the present political economy” he added.

 In his own reaction, the managing director of the Federal Airports Authority of Nigeria (FAAN), Saleh Dunoma, an engineer, said his Authority would support any effort aimed at maximizing the potentials in the country’s air cargo sector.

He stated that the quest to maximize these potentials has led to the remodeling of designated perishable cargo airports across the country. 

According to him “a recent IATA report suggested that cargo volumes are expected to grow by 4.5 percent in 2015, as compared to the time when air cargo business faced weak markets and increasing competition since 2011’’.

The MD, who was represented by FAAN’s director of Cargo Development, Dr. Uche Ofulue, therefore called on all private investors and stakeholders in the aviation industry to reach out and showcase the rich potentials of Nigeria to the world by keying into the opportunities available in the country’s air cargo industry.

According to him, “some strategic airports in Nigeria like Akure, Makurdi, Minna, Abuja, Owerri, Calabar, Ilorin, Jalingo, Jos, Uyo, Kano, Lagos and Port Harcourt have been designated dry cargo airports, for the direct exportation of fresh agricultural produce from surrounding local communities to markets in Europe, the United States of America and other countries across the world”. 

He further assured that “Work has already started on some of these cargo terminals at some airports across the country”.

Among dignitaries who attended the event included: Director of Airport Operations, FAAN, Capt. Henry Omeogu, national president, NAGAF, Eugene Nweke, acting chief commercial manager, Seyi Adewale, MD/CEO ANCLA, Nze Aloysius Emeka and general manager, Economic Regulation/Facilitation of NCAA, Mrs. Anthonia Abiola Vincent.

QUOTE: “It’s therefore no surprise that our economy has been badly hit and worsened by the election postponement. There has been travel bans from many European countries and this has negatively impacted on the aviation sector. Nigeria’s foreign reserves is significantly depleted and our national account is in deficit.”