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Govt Policy, Poor Economy Affect Airline Revenue

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L-R: Senator representing Benue South, Sen David Mark, Gov. Olusegun Mimiko of Ondo State and Sen Saidu Kumo during their meeting at the Akure Airport recently.

L-R: Senator representing Benue South, Sen David Mark, Gov. Olusegun Mimiko of Ondo State and Sen Saidu Kumo during their meeting at the Akure Airport recently.

International and local air
lines operating in Nigeria are facing a tough time as the present government policy to limit the use of first class and business class tickets by Ministers, Permanent Secretaries and some heads of parastatals reduces revenues.
This is sequel to government resolve to effect 20 per cent reduction in air travel expenditure, as the figure of N64 billion expended on travels in 2015 by government officials is considered outrageous.
The Minister of Finance, Mrs Kemi Adesoun who disclosed this to select journalists after a special event hosted by the Lagos Business School (LBS) recently stated that government is determined to embark on cost cutting measures that would involve direct bulk purchase of tickets from the airlines, as government plans to re-position the country’s economy through her ministry as the arrow-head.
Adeosun hinted the efficiency unit in the ministry has recorded some giant strides, including reduction of procurement opaqueness within FGN, providing cost savings guidelines to government, saying that additional innovations like online procurement system for travel, basic goods and other services employing vetted suppliers and a clear accounting as well as approval system will be applied.
However, experts in the aviation sector argue that in spite of these innovations and the ones yet to take off, they may affect airlines revenue, especially foreign airlines which charge an average sum of N2 million on their first class section for trips outside the country.
“I noticed that the first class at the Virgin Atlantic, a few days ago were empty, while the business class and the economy class were relatively full, unlike what we had before now, where the first class is usually full”, a frequent traveller on the Lagos-London routes who craved anonymity, told The Tide Aviation Correspondent.
Our source further disclosed the business class of a British Airways flight was likewise virtually empty about three weeks ago, when he travelled on the airline.
British Airways Commercial Manager, Kola Olayinka told The Tide Aviation Correspondent that though the government policy is affecting airlines, especially international airlines, they have to comply with the policy in good faith and see how best to make revenue to cushion the effect.
“Anything that changes the equilibrium of customers will affect us. But this is a government’s decision and we have no choice in the matter. We have to go back to the drawing board and see how else to re-strategise”, Olayinka said.
Chief Operations Officer, Tropical Arctic Logistics Ltd, Femi Adeniji, a helicopter logistics firm told The Tide Aviation Correspondent that government’s policy on reducing travel expenses is a good step, as it will reduce unnecessary expenditure and wastages and will enable the government to raise funds to addressing more pressing issues in the country.
Adeniji, however, explained that if the airlines involved are able to re-strategise properly the effect might just be minimal, “The first class and business class are minimal to the economy class. The business people can still travel first class if they have the money and value the advantages accrued to flying first class”, Adeniji said.
In the same vein, experts in the aviation sector say the current forex policy of government and resulting shortage have caused an unparalled increase in airfares from Nigeria to other countries and the effect may stunt the growth of the industry.

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COVID-19: Arik Airline Sacks 300 Staff

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At least 300 staff of Arik Air have been relieved of their appointments by the airline’s management.

This was announced in a statement by the airline on Friday.
It blamed the sacking on the impact of COVID-19 pandemic.
The press statement was titled, “Arik Air management declares 300 staff redundant”.
The company explained that a redundancy package would be provided for the affected workers with the help of the aviation unions.
The statement read in part, “Arising from the devastating impact of the COVID-19 pandemic, leading to the constrained ability of the airline to complete heavy maintenance activities and return its planes to operations, stunted revenues against increasing operational costs, the management of Arik Air (In Receivership) has declared 300 staff members redundant to its current level of operations.
“The leadership of the impacted unions has been contacted to negotiate a redundancy package for the affected staff.”
The airline added that over 50 per cent of its workforce of over 1,600 staff have been on furlough in the past six months.
In a separate statement also forwarded to our correspondent by its Public Relations and Communications Manager, Banji Ola, the airline apologised to passengers whose travel plans were disrupted by the protest carried out by the National Union of Air Transport Employees on December 3, 2020.
The picketing disrupted operations in Lagos and prevented the airline from processing passengers at the Murtala Muhammed Airport Domestic Terminal 1 and 2.

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S’East Leaders Laud FG Over EndSARS

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South-East leaders on Saturday, lauded the Federal Government on the matured and responsive manner it handled all issues relating to the EndSARS protest and agitation.
The leaders of the zone, which included Governors, Senators, House of Representatives members as well as traditional, religious and youth leaders, gave the commendation in a communiqué issued after their meeting with a Presidential delegation in Enugu.
The presidential delegation was led by Prof. Ibrahim Gambari, who is the Chief of Staff to President Muhammadu Buhari.
“We thank President Buhari for the speed and restraint with which he handled the EndSARS protest, which has engendered peace throughout the country, especially the South-East.
“We, therefore, request the President to look into demands of various groups and youths with a view to resolving them,’’ the statement, which was read by the Chairman of South-East Governors’ Forum, Governor Dave Umehi, said.
It also called for joint operation by security agencies and local vigilant groups into all forests in the zone to flush out criminals and killer herdsmen with AK47 rifles.
“But we pledge our commitment to continuous coexistence with peaceful herdsmen who have been living peacefully with us.
“We stand for an indivisible and united Nigeria, built on love, fairness, equity and justice. We believe that under this platform – NIGERIA; we are bigger and stronger,’’ it said.
It also called on the Federal Government to continue its support and diplomatic push for the former Coordinating Minister of the Economy, Dr Ngozi Okonjo-Iweala, to be elected as the Director-General of the World Trade Organisation (WTO).
The statement thanked the Federal Government for the timely interventions in Akanu Ibiam International Airport rehabilitation as well as intervention in road infrastructures in the zone.
“We are grateful for the attention given to the second Niger Bridge and completion and inauguration of the Zik’s mausoleum.
“However, we urge the Federal Government to give attention to the completion of the current road projects within the zone,’’ it said.
The statement said that the states in the zone will provide money for the compensation for those affected by the EndSARS protest, help to rebuild police stations and their logistics; while engaging the youths constantly to forestall any violent development in the zone.
“We have plans to set up various empowerment programmes to gainfully engage the youths. The governors also plan to mainstream the youths in their governance to give them a sense of belonging.

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Minister Hails Meeting With S’East Leaders

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The Minister of Information and Culture, Alhaji Lai Mohammed, has described as “extremely fruitful” the meeting which a presidential team had with leaders and stakeholders of the South-East.
“The meeting of the presidential delegation with South-East leaders was very useful,’’ Mohammed told journalists on Sunday in Enugu.
The delegation, led by Prof. Ibrahim Gambari, Chief of Staff to President Muhammadu Buhari, met for more than eight hours in Enugu with selected South-East leaders.
Mohammed said that it was quite instructive that all the groups which took part in the meeting believed in the unity and oneness of the country, pointing out that they clearly spelt out this in their presentations.
“We listened clearly and carefully to all the positions and demands and we are going back to report directly to President Buhari,’’ the minister said.
He noted that the Federal Government had been spreading development and infrastructure to all parts of the country, simultaneously and equitably.
“We want the South-East people to be confident that the Federal Government is spreading development and infrastructure to all parts of the country equitably and will never marginalise any zone in the ongoing development and infrastructure agenda.
“This is what I want to assure Nigerians living in the South-East,’’ Mohammed noted.
According to the minister, when the team gets back to Abuja it will see what can be done immediately concerning some of the positions and demands made by the South-East leaders.
The presidential delegation met with South-East governors, statesmen, elders, religious and traditional leaders, as well as market women and youth leaders.

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