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IMF Predicts Global Economic Recovery

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International Monetary Fund Managing Director Dominique Strauss-Kaho has said that the global economy has made remarkable progress and now stands at the cusp of recovery.  However, he warned that it still remains  highly vulnerable to shocks and policy missteps. In a speech delivered at the Annual Conference of the Confederation of British Industries (CBI) in London, Mr Strauss-Kaho said policy makers stand at a critical juncture where the sustainability of the global recovery will depend on the decisions they make in the months to come.

“Today the storm has passed.  T he worst has been averted.  And yet the economy remains very much in holding pattern-stable, and getting better, but still highly vulnerable”, Mr Strauss-Kaho said.  For policymakers “the challenges are great” during the crisis, everyone was united by a common purpose.  Going forward, this might dissolve.  So the road ahead will be less clear cut.  We will need some debt  maneuvering, and perhaps some out-of-the-box thinking. We will certainly need continued collabora tion”, he added.

Mr Strauss-Kaho said policy makers will face  four main challenges, which include existing from accommodative policies, adapting to increasing capital flow to emerging market, developing a  new global grown modes, and designing and implementing financial sector reforms.

On exit strategies, Mr Strauss-Kaho stressed the importance of waiting for a sustained recovery in private demand, as well as clear indications of financial stability before accommodative measures are withdrawn.  “It is too early for a general exit.  We recommend erring on the side of caution, as exiting too late”, he said. Plans for fiscal consolidation should be the top priority, especially in advanced economies.  And monetary policy can afford to stay accommodative for some time, given little sign of inflation on  the horizone.

A related challenge to exit strategies is managing capital flows to emerging markets. “In many countries appreciation should be the key policy response other tools include lower interest rates, reserves accumulation, tighter fiscal policy, and financial sector prudential measures.  Capital  controls can be part of the package  of measures”, he said in his speech. “But we should recognize that all tools have their limitations.

we should be pragmatic”, he added.

Moving to the challenge of creating a new global growth model, Mr Strauss-Kaho said the old paradigm of growth generation based on household in the US was dead.  “If we are to have sustained global growth, somebody else needs to step into the breach.  The leading candidates are the surplus countries.  And we can see some shifts in the right direction.  China and other emerging Asian economies are shifting from exports to domestic demand.  But they have some way to go.

Mr Strauss-Kaho underscored the importance of forging ahead with a number of reforms to make the financial sector a more stable place.  He stressed the challenge posed to policy makers by increased risk taking in the financial sector while financial institutions are still in poor shape while regulators seek to impose tough new standards that may jeopardize recovery.

“How do we square the circle?  One possible answer is to reduce regulatory uncertainty.  It is throwing up some perverse incentive and might be encouraging a risk taking culture”, he said.  Also on addressing risk management in the financial sector, he added t hat it was essential to break the  link between risky behaviour and compensation. “In this cont- ext we have been asked by the G-20 to look into financial sector taxes.  There are a number of ways to think about this and we will look at it from various angles and consider all proposals he said.

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NSIB, AAAU Sign MoU On Air Safety Training

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As part of efforts to curb mishaps in the aviation industry, the Nigerian Safety Investigation Bureau (NSIB) has signed a Memorandum of Understanding (MoU) with the African Aviation and Aerospace University (AAAU) to deepen training on preventing and reducing accidents in Nigeria’s air transport.
Director, Public Affairs and Consumer Protection of NBIS, Mrs Bimbo Olawumi Oladeji, in a statement, said NSIB granted AAAU access to its facilities to facilitate an efficient exchange of resources and expertise.
According to the statement, the Director-General/Chief Executive Officer of NSIB, Captain Alex Badeh, who spoke at the ceremony held at the NSIB Training School, noted that the MoU sets the stage for facility sharing, capacity building, and collaboration between the Bureau and AAAU.
“I am confident that this MoU will enhance the effectiveness of our collaboration and commitment to promoting safer skies and operational excellence in the aviation industry in Nigeria and beyond”, Badeh said.
Registrar of AAAU, represented by the Director of Physical Planning and Works, Engineer Masud Aliyu Yerima, was also quoted in the statement, saying, “The journey of AAAU’s establishment and progress would have faced considerable challenges without NSIB’s generous support”.
He commended Badeh for his exemplary leadership and steadfast dedication in propelling NSIB to greater heights, and affirmed AAAU’s readiness to engage in mutually beneficial endeavours with NSIB.
“This partnership marks a significant milestone in fostering a culture of safety and excellence within Nigeria’s aviation sector, and both NSIB and AAAU are poised to leverage this synergy for the benefit of the industry and the nation at large.
“The African Aviation and Aerospace University, AAAU, is the first Pan-African university dedicated to aviation, aerospace, and environmental science.
“Addressing two critical needs within the continent’s industry, AAAU tackles the research and development gap in Africa’s aviation and aerospace sector while simultaneously cultivating a skilled workforce to propel it forward”, the statement added.

By: Corlins Walter

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Naira Rebound, Air Peace’s Expansion Deepens International Route Competition 

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he commencement of flights operations on the London route by an indegenous Carrier, Air Peace Airline, and the recovery of the local currency have sparked fresh competition on international routes.
Air Peace, Nigeria’s outstanding indigenous airline, may face a prolonged market battle with many foreign airlines with decades of experience in the industry following its entrance on the Nigeria-London route.
Some of the industry’s experts say the airline required support from the government and a strategic approach to stay competitive.
Analysts have also stated that the strategic move has garnered high praise from stakeholders in the aviation sector, considering that Nigerians were paying exorbitant prices to travel from Nigeria to London, but that sustaining this momentum will require more than just offering low prices.
On March 31, 2024, the 11-year-old airline made a bold statement with its inaugural flight, using a Boeing 777 aircraft, offering a capacity of 274 seats and carrying 260 passengers from Lagos to London.
It sold its tickets for N1.2m, a price way lower than the rates offered by most foreign airline operators plying the same route.
Just two weeks after entering the market, Air Peace’s Chief Executive Officer, Allen Onyema, complained on Arise TV that foreign airlines were undercutting prices in an attempt to push Air Peace out of the market.
Onyema said, “We are aware that there are devilish conspiracies. All of a sudden, airlines are pricing below the cost. One airline is advertising $100  and the other $350. If you peel up your entire aircraft and carry people on the wings, it is not even enough to buy fuel.
“Why are they doing that? Their government is supporting them because Nigeria has been a cash cow for everybody. The idea is to take Air Peace out, and the moment they succeed in taking Air Peace out, Nigerians will pay 20 times over. It would happen, God forbid, if they were able to take Air Peace out”.
It was gathered that an economy ticket for a flight scheduled for April 29, 2024, from Lagos to London costs about N679,375 on Ethiopian Airlines, an operator with 75 years of experience.
Air Peace priced the same ticket at N1,090,750. The difference is that on Air Peace, it will be a 6-hour non-stop flight, while on Ethiopian Airlines, it will take 16 hours with one stopover.
Last Friday, Ethiopian Airlines reduced the price of its London ticket by 0.77 per cent to N1,628,660 from  N1,641,249 two weeks ago.
In the same period, Air France’s price dropped to N1,687,824, nearly halving from last month’s N2,482,138.
On March 4, 2024, Lufthansa offered the Lagos-London route for N1,966,165. Qatar Airways provided the same ticket for N2,016,824, and KLM priced it at N2,448,740.
This continuous decline in air ticket prices was also driven by the strengthening of the naira against the US dollar and the payments of airlines’ trapped funds by the Central Bank of Nigeria.
Minister of Aviation and Aerospace Development, Festus Keyamo, had confirmed that the Federal Government, through the CBN, had cleared all the trapped funds (foreign exchange backlogs) to the tune of about $160m.
Beyond the ongoing price war, the Air Peace Chairman had also lamented the challenges with ground handling and space allocation at the London Gatwick Airport, adding that no airline has faced such obstacles before.
He noted, “On the inaugural flight out of London, 24 hours before departure, the management of Gatwick Airport moved us to another checking area instead of the designated one.
“The area they provided had a malfunctioning carousel, forcing us to manually transport luggage 50 meters away, causing delays”.

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PH Airport Users Lament Down Turn In Flight Operations 

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Users and business operators at the Port Harcourt International Airport, Omagwa, have decried the downward trend in flight operations at the airport.
Some of the users and operators told The Tide that flight operations at the airport, rather than go upward, have steadily been irregular, and diminishing steadily.
A regular air passenger of the airport, Simeon Echeonwu, in a chat with The Tide, said many airlines, both domestic and international operators, that usually operate at the Port Harcourt airport, have stopped operations, whereas others that are still operating are no longer very stable as before.
Echeonwu noted that airlines such as Aero Contractors, United Nigeria, and Green Africa airlines, now operate about one flight, twice a week, unlike before that they flew every day on Lagos and Abuja to Port Harcourt.
Also speaking, former Chairman of the FAAN Accredited Car Hires Association, Clifford Wahunoro, lamented that the down turn in Operations has affected the business of car hires.
“If you have noticed, I have not been regular at the airport for some time now, because business is no longer flowing at the airport as before. I will not fold my hands and be sitting down doing nothing, so I have to look for other things, so I come when I think there will be something.
“You can see that between 12noon and 1pm, after that segment of flights, when you have few flights arrival, many people will close for the day, and when you wait till evening, flight like Dana may come very late at night, and sometimes, it will not arrive, and by that time, many people will not like to book for commercial vehicle”, he said.
Meanwhile, a travel agent, who wished to be anoyimous, decried the rate at which the airport is going down in terms of flights operations, noting that Port Harcourt airport ought to be competing with the other major airports like Lagos and Abuja.
He queried if such was a calculated attempt to bring the airport to its kneel in terms of flight operations, while other major airports have steady flow of flight operations both for domestic and international.
TheTide observed a continuous distortions in flight movement at the airport. Some of the airlines, like Max air, which many passengers patronize, have completely stopped operations, and no new airline has been added.
Apart from the Air Peace Airline that has maintained some level of stability in operations, other few operators have been involved in either steady rescheduling of flights, cancellation and regular delay, resulting in poor and unpredictable flight movement, which affects or determine other businesses in the airport.

By: Corlins Walter

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