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Revenue plunges as Nigeria loses aviation hub to Ghana

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Ghana Airline

Ghana Airline

• NNPC, MOMAN move to tackle fuel challenge

Nigeria has lost its status as the aviation hub in West Africa to Ghana, a neighbouring country.

Already, the revenue that accrued to Nigeria from the fuelling of aircraft and accommodation of cabin crews of foreign airlines has been taken over by Ghana, which now provides these services.

The situation is partly attributable to the 100 per cent increase in the price of aviation fuel in Nigeria, while Ghana slashed the same product by 20 per cent.

Besides, regulatory agencies like the Nigerian Civil Aviation Authority (NCAA), Federal Airports Authority of Nigeria (FAAN) and Nigerian Airspace Management Agency (NAMA) are losing revenue.

The price of Aviation Turbine Kerosene (ATK), also called aviation fuel or Jet-A1, rose from N120 some months ago to N240 per litre since the Central Bank of Nigeria (CBN) introduced the flexible foreign exchange policy.

Aviation fuel is 100 per cent imported, which subjects it to the vagaries of foreign exchange, especially the United States dollar. With the exchange rate around N350 to $1, aviation fuel in Nigeria has become one of the most expensive on the continent.

Due to the price increase, coupled with irregular supply of the product, foreign airlines experienced difficulties refuelling during their trips. For instance, Emirates Airline, which recently reduced its two daily flights from Lagos to just one, last week made a re-route to Ghana, to buy fuel for its Abuja-Dubai flight.

It was learnt that Nigeria’s customer of many decades, British Airways, had started buying fuel from Ghana to power its airplane carrying Nigerian passengers to the United Kingdom.

Air France last week announced that from 2017, it would commence three weekly flights to Accra in Ghana from Paris-Charles de Gaulle. These flights will be operated by Airbus A330 with a capacity of 208 seats until 27 March 2017, then by Boeing 777-200 with 312 seats.

Sources told The Guardian that Ghana had become the new bride of the foreign airlines due to efforts by the government of that country to make the Kotoka International Airport in Accra, the aviation hub for West Africa.

A source, who is one of the facilitators that negotiated the 20 per cent cut on aviation fuel in Ghana, said the West African neighbour might have succeeded in beating Nigeria to being the regional hub for international airlines.

He said unlike Nigeria, Ghana already had a robust connectivity plan in place, which opened the country’s airspace to African and international carriers with so much reciprocity.

“What they have done with the fuel price cut is to further attract the airlines to Accra,” the source said. Aviation fuel is central to the operations of an airline as it constitutes between 35 and 40 per cent of business cost.

“Fuel in Ghana used to be one of the most expensive with government tax being one of the main factors for the cost. But with the support of the Civil Aviation Authority (CAA), and the airport authority in Ghana, we made proposals to the government to take off the 20 per cent tax accruing to government to make Ghana more competitive.

That was what they did. Their fuel is now on the same level with that of Ivory Coast, which is their biggest rival, and even lesser than what we have in Nigeria.”

Commenting on the implications, the Executive Secretary, Major Oil Marketers Association of Nigeria (MOMAN), Obafemi Olawore, said that besides the loss of revenue, the development was bad for the country’s image.

Olawore reckoned that the development could have been avoided if the Federal Government had given the oil marketers the needed assistance, like forex, to facilitate the import of aviation fuel and sell in the country at affordable prices.

He said MOMAN was in talks with the Nigerian National Petroleum Corporation (NNPC) for weeks to provide them forex at interbank market rate. “Nevertheless, we are continuing with our private arrangements to bring in the product (Jet-A1). Between this week and the next, we are expecting 40 million litres of aviation fuel. By the time that arrives and NNPC also brings in its own, things will start looking up. Those airlines that have gone will start coming back to Nigeria. Because it is easier to refuel in Nigeria than elsewhere,” Olawore said.

Industry watchers noted that unless such optimism becomes reality, regulatory agencies like NCAA, FAAN and NAMA that have been complaining of low revenue may face more hardship amid Federal Government’s demand for improved turnover.

The agencies are currently moving to retrieve the over N30 billion from domestic airlines indebted to them in the last 16 years.


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40 Comments
  • cajaegbu

    Sai Baba!

  • pmagroup

    Dear President M. Buhari, Nigerians voted you in power because we are hunger for a change, the change you promised is not coming rather what we are seeing is a bad economy which the past government is by far better than your government. In your regime as our president, we have loose our number level as the giant of Africa to South Africa, many company are leaving Nigeria to Ghana because of your government.

    • gogolagos

      please, do not blame always buhari for everything, in the same way parents should not always be blamed for incapacity of their grown children. buhari can not be every where. he can not do all the work alone. he can not play the drum, sing, dance, and direct the orchestra.

      • Ogom

        Grow up!

      • Osanebi Osakuni

        Blame me. You will remain a surprise to the sane world if you think an illiterate will steer your collective destiny to growth rather than the failures being experienced today. Laughable!

        • Artful ºDodger

          If only you were even as educated as the sole of the worst shoe of Buhari and the ground he walk on, your folks and generation would have had something to cheer about. Unfortunately, for you, even the second you took your first breath on earth passed away with regrets! Simply put, you are brain dead.

        • gogolagos

          Nigerians voted him in

      • Mizch

        How much of support did he give to the past administration? Just asking.

    • Artful ºDodger

      A combination of factors are responsible for the current economic situation fool. Incompetent and clueless Jonathan not consolidating on the savings he inherited is one of them. Take your ignorance to the latrine where you igbos dwell with pleasure nowadays dude!

      • pmagroup

        Dr. Shakespeare, please do not insult me because i did not insult you.

        Jonathan was clueless but for the first time, our economy was booming, and it was during the clueless Jonathan regime.

        But why all this hatred to the lgbo, it means there is something in them that others do not have but you can’t change it because you are not God. I will advice you to embrace them for your own good now or it will be late.

        • Artful ºDodger

          Your economy was booming? And you are asking why i said you are a moron or igbo? Dude, crawl back into acute hypocrisy where you came out from and remain there. You are better off beating your chest among your folks there than abusing the privilege of internet and the social media with your stupidity.

      • George V

        How much is Buhari saving now? Or you can only save when oil is $100. How much was it when OBJ came in in 1999? You must bring Jonathan in to satisfy your hatred. Check out what is happening now and compare with what happened in 1984. Then still blame Jonathan for 1984

  • Paului

    Any lousy financial and governmental regulations have consequences. This current administration have blindly instituted idiotic and business killing policies that undermines free market.

    • Artful ºDodger

      Igbo moron! Shut the fk up and crawl back into the bottom of hypocrisy where you people dwell with pleasure lately.

      • Paului

        Your reply reflects the inability to understand that failed policies are responsible for these catastrophic economic failure. You don’t need to insult people as you have done.

        • Artful ºDodger

          You can read and write but yet still chose to remain an illiterate, in acute ignorance and would rather dwell in hypocrisy and conspiracy theories. I have a very low tolerance threshold for the deliberately stupid. That you igbos have issues with Buhari´s government, his Northern extraction does not mean the rest of mankind should be deliberately myopic and stupid too. Before you comment nonsense next time trace the genesis of the problems so as to be able to lay the blames at the right doorstep.

      • Buhari d daft cow.

        Wazzork

      • Buhari d daft cow.

        Gif.

  • Razorblade Abefele

    A bungling government that reels out policies without thinking it through. We are in trouble!

    • Artful ºDodger

      Shut the fk up and stick to the ignorance you know moron!

  • bangiso mhlabeni

    Irresponsible regime.

    • Artful ºDodger

      Igbo moron! It always make sense to know something about the cause of a problem before you run your mouth displaying your acute ignorance and the fact that you are igbo still in mourning mood.

      • pmagroup

        That is the reason why as a country we cannot change. Tribalism, that our country is in a bad shape and you saying “Igbo moron”, that is very sad, maybe you and your family are not feeling the hardship in Nigeria. What is the exchange between dollars to our currency, while during PDP even though many said that they were bad, but we were not crying, now we voted for a change and we are not seeing anything good rather than bad, what a shame to us as a country.

        • Artful ºDodger

          It is either you were born without a brain or somehow yours and that of the rest of your folks have been in hibernation. Can you not read, i said you should try to get proper knowledge of situations before you display your ignorance about them. And since you are too blinded in your life of self denial and make belief to be able to broaden your horizon, it might interest you to know that the foundation for the mess you are in now was laid by the incompetent Jonathan and his PDP. Its not like i expect you to acknowledge any of these since you igbos. Chasing after make beliefs, self denial and hypocrisy in your wannabe ijaw is what define you people nowadays. Ijaws does not make up the majority tribe in the SS, secondly you igbo and your biafra can never get your hands on the SS oil. Your biafra begins and end in your five SE states. So no matter how hard you try to cry more than the bereaved, you will never be welcomed in the SS if ever Nigeria were to break up. The sooner you igbos of latrine values get these simple reality into your psyche the better for you. If you hate your life so much right now as a Nigerian, try Venezuela(that is if even you know what i mean) or better still take a rope go and hang!

          • SOBOS

            With all your English what contribution have you now made to defend your Buhari, I voted for Buhari because i thought Jonathan was clueless. Now i have seen the height of cluelessness but this is the beauty of democracy we must keep experimenting until we get it right.

  • gogolagos

    economy is not what you can do by force, it needs study and balance of equation. Airlines are lamenting of lack of organization in Nigeria, bribery and delay in services. Giant of Africa for mouth!!!!!!. the is a normal proverb that says: GIANT AND STUPID.

  • Irele ati ITELORUN

    Mr. Writer, please can you give us a comparative table on aviation fuel cost in West Africa and Europe. Nigeria is not in competition with Ghana when it comes to Aviation, yes we need to improve on a lot of things but certainly not subsidize aviation fuel for airlines, international airlines! No way, if Ghana chooses to do that in order to attract traffic, good for them, let us watch how it pans out. Meanwhile, I will advice our govt NOT to subsidize but focus on efficiency and safety. Maritime and Avai

  • Mystic mallam

    No one should complain; it is Jonathan’s fault. Mismanagement of Nigeria’s forex policy in the last year when some privileged people can lounge in their palatial gardens, place a call to CBN and get $10 million without investing a cent, then sell same in the open market and make N1 billion profit -{SLS} is Jonathan’s fault. Wasting foreign exchange on Hajj rather than industry is Jonathan’s fault. Unwillingness to establish a credible economic team to focus on the receding economy, and inability to design a credible economic road map for the country in the past year, is all Jonathan’s fault. I think we should devote the next 3 years of Buhari’s administration to blaming Jonathan and hunting down PDP thieves. We must continue to seize the loots of the PDP thieves and account to no one and disclose to no one what/how much we have recovered in the last 15 months; then we should blame Jonathan for the lack of transparency in our seizure/recovery policy. Finally, when the seized/recovered loot goes missing as is already happening, we should blame Jonathan. After all finding scapegoats and blaming predecessors for our gross failures is a great strategy for putting bread and butter on peoples’ tables.

    • SOBOS

      you were make sense until you said PDP thieves, I don’t have problem when PDP thieves are hunted, But i also want Buhari to do with is right,.

      • Mystic mallam

        You also have Apcthieves whom. Buhari will not probe, but relax my friend, their payback time is ahead, they started it but they won’t end it.

  • O F

    Nigerian Government has misplaced priority.The president thinks he can be condoning evil with one hand and doing ‘good’ with the other hand,and still get results.Killings and deaths thrive in Nigeria. You’re still talking progress? Dream on.

  • Osanebi Osakuni

    Illiteracy is indeed a disease. While TSA has almost crippled the banking sector from the way I has been implemented, The stock exchange and indeed the real sector of the economy has almost been choked out of operation. Consequently Nigeria lost her economic rating to South Africa already. Today we are losing aviation revenue earnings to Ghana. What a pity? Buhari is a fantastic error of a country.

  • L’bookie

    At least the author of this piece should have stated the prices of ATK in Ghana, Cote d’voire. Ghana slashed the price by 20%, so what is the price now? Is the author certain the main reason for airlines moving to Ghana is just because of aviation fuel? I think it is more of difficulties in repatriating their funds.

  • Mizch

    Good news about CHANGE!!!

  • emmanuel kalu

    very sad. All because we can’t get our act together to make Nigeria the hub of Africa. we still don’t maintain our planes in our country, we can’t even supply fuel, fuel that would be cheaper if we can refine crude oil in the country. our regulatory agency are now used as revenue generator instead of agency that promote fair play, safety and consumer protection.

  • Eldorado

    some judgements made by
    Nigerians on it’s economy assures me of the fact that the Nigerian education system needs a thorough overhauling and that it is an emergency.
    If this level of ignorance is allowed to continue, it could lead to anarchy.

    • SpeakUp Naija

      Formal education is not our problem.
      Our value system is the problem.
      Almost no one thinks objectively anymore.

  • Christopher Ilogho

    What a shame! Is it that we don’t have a government that thinks or proactive? Any way, no one can give what he does not possess. Education is of the essence.

  • LadyRosely

    The illiterate in power has run the ship aground with his incompetence, inability to listen, bigotry and nepotism. Nigeria will take at least 20years to recover from this damage. The man is cursed

  • omo56

    As long as we cannot generate enough power to run the country, Nigeria will never progress. It was not too long ago when tire manufacturing companies moved out of Nigeria for Ghana. Not a single Nigerian government took this on as a challenge to reverse outward flow of essential manufacturing segments of Nigeria.

    We cannot be great importing from everywhere and from everyone. We must manufacture most of the things we use, this will create jobs