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Local Airlines Lose N39.2 Billion Yearly to Expatriates

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First Nation Airline
  • Local Airlines Lose N39.2 Billion Yearly to Expatriates

Local airlines are weighed down by a yearly wage bill of N39.2 billion for expatriate pilots and engineers. Some of these domestic carriers which are already in distress parade no fewer than 682 foreign pilots with cumulative wage bill in excess of N3.27billion a month. Foreign maintenance engineers are also in the excess of 300 across the board.

Figures from the Nigerian Civil Aviation Authority (NCAA) show a total of 2,269 active licensed pilots of who 1,646 are Nigerians. Non-Nigerian pilots are 623, while there are at least another 59 pilots with certificates of validation, though not licensed by Nigeria as at March 27, 2017.

The situation encourages capital flight. The expatriate wage bill of N3.27billion is enough to pay a total of 1,646 active licensed Nigerian pilots. Put to different use, the expatriate wage bill of N39.2billion per year can offset the airlines’ outstanding liabilities to regulatory agencies in the last six years and still keep them afloat.

Comparatively, a foreign captain earns at least $12,000 (N4.8million) a month. The best paid Nigerian captains are those in managerial positions, who earn about N2.5million a month, while most of them earn about N1million.

Arik Air, which started with a foreign managing director, has 28 aircraft fleet-size and parades the largest retinue of expatriates, including pilots, engineers and crew. German Airline, Lufthansa, is saddled with maintenance, while Indians do the reservations.

Dana Air started operations with planes that required foreign pilots with over 500-hours of experience on MD 82/83 aircraft type. Till date, foreigners still man its cockpits. Two foreign pilots were in the cockpit of the aircraft that crashed in 2012 in Lagos.

The Secretary General, Aviation Round Table (ART), Group Captain John Ojikutu, noted that the penchant for foreign pilots is not about them being “better than the Nigerian pilots; it is more about capital flight than any other consideration.”

About three years ago when the oil market was booming, and with about 200 private jets in the airspace, the ratio of expatriate to local pilot was three to four, with at least 1,000 foreign pilots in Nigeria.

The Chairman, Nigerian Aviation Safety Initiative (NASI), Capt. Dung Rwang Pam, said the wage bill would not have been much about two years ago when the exchange rate was less than N200 to $1 and more expatriates were around. But with dollar to naira rate hitting the roof, some of the airlines are beginning to buckle under their overhead.

Investigation shows that some operators are quite unsettled with the bloated overhead and are considering ways to reduce it.

The aviation sector is high-capital intensive and dollar-denominated but with very low profit margin. On a good day, a well-run airline earns six per cent profit margin.

Leading rotary wing helicopter services operator, Bristow Helicopters Nigeria, recently sacked 118 expatriates including pilots and engineers, citing downturn in the oil and gas sector.

Similarly, Caverton Helicopters dismissed 150 staffers, among them foreigners.Arik Air was in February taken before a UK High Court of Justice (Chancery) by 20 of its foreign pilots. The expatriates sought to “wind up” the company over the non-payment of their salaries by the airline amounting to $600,000 (N240million).

Since the Asset Management Corporation of Nigeria (AMCON) took over the management of Arik, The Guardian learnt that efforts are on to tackle the challenge of “too expensive pilots and engineers” where there are cheaper equivalents in the Nigerian workforce.

But the challenge is that “a layoff will require compensation that is even more crazy than their wages. So the management wanted the current contracts to run, without a plan to renew any once they expire. The burden is too much to bear at this time,” a source said on a condition of anonymity.

One of the airlines was apparently more innovative with the expatriate release strategy. It was learnt that the airline started paying the foreigners in naira, instead of dollars, to absolve it from the attendant excess cost on account of dollar fluctuations. Displeased with the mode of payment, the foreigners began to leave on their own, and are seeking better prospects in other airlines.

Meanwhile, there has been an upsurge in the global demand for good pilots lately, where some of the expatriates have been finding new opportunities.Domestic carriers have not been spared of the poaching, with about 12 Arik pilots, and six from Air Peace, moving to RwandAir, Emirates, Etihad and others.

With the foreign pilots and some Nigerians finding better offers abroad, fresh opportunities are opening up for about 400 young Nigerian pilots that are unemployed. President, ART, Gabriel Olowo, said poaching was a plus, especially in the light of the downturn being experienced by some airlines

He said: “What will a pilot do if there is no aeroplane to fly? If I am in Arik and aeroplanes go from 30 to nine, and the pilots are sitting down, they can’t fly, what do I do? I’ll roster them but there are no aeroplanes and they ask me to pay allowances. That was why they (unions) picketed Landover, because pilots were scheduled and there were no service for them. Let them poach them and go and gather the experience; the day we need them, we will look for them.”

The challenge, however, is the little or no experience at the disposal of unemployed pilots. More so, domestic airlines are reluctant to fund the cost of type-conversion course in excess of $30,000 (N12million) per pilot.

“It’s cheaper and easier to employ an already rated pilot. With less than 300 flying hours (instead of 500 to 700 required to fly certain categories of aircraft), and no jet experience, very few airlines are attracted to freshly licensed pilots,” a chief operating officer said.

Doyen of the aviation sector, Capt. Dele Ore, called for an urgent review of the operating expatriate quota that has over the years been responsible for “widening the imbalance between expatriate and indigenous aviators in the sector.”

According to Ore, “for security reasons, we need to make it a policy that all registered aircraft in Nigeria must have a Nigerian onboard the cockpit. This means that either the commander is a Nigerian or the co-pilot is a Nigerian.

“Let’s face it. Haven’t you heard of situations where one pilot goes to the toilet and the other locks himself up? That is the security aspect of it. Second is that you are providing jobs for those Nigerians that are roaming the streets. That way, you are also helping government policy that wants to stop capital flight because what is spent on one expatriate is enough to train and nurture five to six Nigerians,” Ore said.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Appointments

Heirs Oil & Gas Announces CEO and Board Appointments

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Tony Elumelu

Heirs Oil & Gas (HHOG), the leading African integrated energy company, has announced the appointment of Osayande Igiehon as Chief Executive Officer, effective May 4, 2021, together with a distinguished non-executive board, bringing together leading industry figures, with considerable global and regional experience.

Heirs Holdings Limited’s (HH) portfolio company, HHOG, completed the acquisition of OML17 in January 2021, in one of the largest oil and gas financings in Africa in more than a decade, with a financing component of US$1.1 billion. The transaction represents a further implementation of the HH Group strategy of creating the leading integrated energy business in Africa. Through a series of strategic portfolio holdings, HH is executing this strategy. Most recently, affiliate company, Transcorp made a US$300 million acquisition of Afam Power, increasing the Group’s installed electricity generating capacity to 2,000MW.

Mr. Igiehon, who joins from the Royal Dutch Shell (Shell), where he was previously a Vice-President with the Group in the Hague, Netherlands. He brings over twenty-seven years of experience and expertise in the oil and gas sector with Shell, where he held a series of senior management positions. Mr. Igiehon previously served as Chairman and Chief Executive Officer of Shell Gabon, where he led the successful turnaround of the operational, safety and financial performance.

HHOG is also pleased to announce the appointment of the following distinguished private sector and senior industry leaders to the Board:

  • Tony O. Elumelu, CON is the Chairman of Heirs Holdings, the United Bank for Africa (UBA), Transnational Corporation of Nigeria (Transcorp), and Founder of the Tony Elumelu Foundation.
  • Sally Udoma who previously served as general counsel for Chevron Europe, Eurasia, and the Middle East Exploration and Production. Previously, she was general counsel for Sasol Chevron Consulting Limited and managing counsel at the London Legal Service Centre for Chevron Global Upstream and Gas. She has also served as general counsel and general manager for Chevron Nigeria Limited.
  • Anil Dua is a founding partner at Gateway Partners Limited, a private equity fund specialising in dynamic growth markets including Africa, the Middle East and Asia. Prior to this, Mr. Dua worked for over thirty-five years with Standard Chartered Bank in Asia, Africa, Europe and the US, where he held various roles including Regional CEO West Africa and Regional Head of Origination and Client Coverage, Africa.
  • Ahmadu Kida Musa who previously served as Deputy Managing Director of Total Exploration and Production Nigeria Limited, has over thirty-two years of experience in the Oil and Gas industry and brings considerable expertise in Nigerian oil and gas.
  • Stanley Lawson currently serves on the board of Transnational Corporation of Nigeria Plc. He is Managing Partner at Financial Advisory & Investment Consultants Ltd. Dr Lawson previously occupied the position of Group Executive Director-Finance & Accounts at Nigerian National Petroleum Corp.
  • Samuel Nwanze is the Chief Finance Officer at Heirs Oil and Gas. Prior to this he was the Chief Investment Officer at Heirs Holdings responsible for investment and capital management.

Commenting, Mr. Igiehon stated: “HHOG represents an extraordinary opportunity, to create Africa’s first true integrated energy company, with a mission to ensure that Africa’s natural resources are directed toward value creation in Africa, powered by sustainable, robust and abundant African energy. I am excited to join the Heirs Oil and Gas leadership team and look forward to the opportunity to transform the energy sector, purposefully address Africa’s energy needs and improve the lives of people across Africa.”

The Chairman of the Board, Tony O. Elumelu, CON, stated: “I am delighted to welcome our new board members. We are building a role model institution for African businesses and our investment in human capital is a further strong demonstration of our intent. The regional and global expertise of our board members will serve to further drive value creation to our continent, as we execute our goal of becoming Africa’s largest, indigenous, integrated, energy company.”

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Brands

CHI Limited Celebrates Its Maiden Hollandia Dairy Day

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Nigeria’s leading dairy brand, Hollandia, is set to hold the maiden edition of its Hollandia Dairy Day. The event which will be celebrated on the 18th of May 2021 will provide a veritable platform to drive the national discourse on the unrivaled health and nutrition benefits of dairy consumption to people of all ages.

Set to be hosted as a conference, the theme of this year’s event is “Dairy Nourishment to Support Healthy Living”, and it focuses on the vital role dairy consumption plays in our everyday nourishment, its benefit to our overall health, and why dairy products should be included in our diets every day.

This conference, which is designed as a hybrid of the physical and virtual events, will feature presentations, interviews and panel discussions from health experts and nutritionists as they provide insights and share perspectives to guide informed decisions about dairy consumption as part of a daily balanced diet. The event is opened to the public through the brand’s multiple social media platforms.

According to a report by the Food and Agriculture Organisation of the United Nations, 2019, Nigeria has low dairy consumption levels per head – 15 to 20 liters per capita consumption. This is partly attributable to the low purchasing power of the average Nigerian household, who rank milk and dairy products as non-essential luxuries and prioritize other staple foods such as rice, beans, and yam.

By provoking the conversations and stimulating public action/intervention, Hollandia aims to drive consciousness for dairy consumption and its importance to achieving optimum health, and to get many more Nigerians drinking, using, and consuming dairy products.

The past year has presented unprecedented shocks and disruptions, including a global COVID-19 pandemic. As communities throughout the world look for ways to minimize the risk of COVID-19, maintaining and boosting good health is top of mind for many. Dairy foods such as milk and yogurt contain essential nutrients, including Vitamins A and D, Zinc and Protein, which support immune function.

The Hollandia Dairy Day Conference is a public interest initiative created to highlight the importance of dairy in everyday nutrition and healthy living in Nigeria.

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Business

Nokia Launches Blockchain-Powered Data Marketplace For Secure Data Trading and AI Models

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Nokia

Nokia today announced the launch of the Nokia Data Marketplace as-a-service to facilitate secure sharing of data and AI models, enabling digital transformation and data monetization for enterprises.

As data volumes continue to surge, AI and machine learning are increasingly crucial in business decision making. Nokia Data Marketplace is designed to help enterprises and communications service providers (CSPs) use data in strategic decision making, by providing real-time access to massive trusted datasets.

The new service also enables enterprises and CSPs to become data marketplace providers themselves, by monetizing data exchanges between customers or business ecosystem participants.

Nokia Data Marketplace ensures trusted data exchange and authorization mechanisms. This enables a wide range of vertical use cases, including electric vehicle charging, environmental data monetization, supply-chain automation and preventative maintenance powering numerous vertical segments, including transportation, ports, energy, smart cities and healthcare.

Friedrich Trawoeger, Vice President, Cloud and Cognitive Services at Nokia, said: “Our customers need secure and trusted access to data for effective business decision making. With Nokia Data Marketplace, enterprises and CSPs can now benefit from richer insights and predictive models to drive digital ways of working and tap into new revenue streams.”

Nokia Data Marketplace accelerates AI initiatives through federated learning. This approach, combined with orchestration capabilities, facilitates the collaborative development of highly accurate machine learning models for analytics use cases. It also meets the growing demand for a platform that can efficiently apply AI and machine learning algorithms to in situ data.

Nokia Data Marketplace complements Nokia Worldwide IoT Network Grid (WING), which offers global IoT connectivity and vertical applications. For example, Nokia WING’s asset tracking solution is enriched by Nokia Data Marketplace’s blockchain to provide secure and automated data exchange and transactions between logistics’ ecosystem partners for faster turnaround.*

Kaladhar Voruganti, Senior Fellow, Office of the CTO at Equinix, said: “Nokia Data Marketplace combined with Equinix data centers allows organizations to share data and algorithms globally at more than 240 metro edge locations. Our Metal platform augments this to provide secure, proximate, on-demand infrastructure to enterprises and government agencies. Sharing and processing of data close to its point of creation mitigate issues related to latency, compliance, and network backhaul cost. These neutral and secure edge locations are connected via high-speed and secure networks to data sources spanning across public clouds, private enterprise data centers and data brokers.”

Wouter van Neerbos, Chief Executive Officer at Marlin, said: “Through automated data exchange among shipping participants, Nokia brings us the transparency and operational efficiency required in our global marine supply chain. This reduces waiting time for shipping participants in the marine ecosystem, enables faster turnaround for ships, and reduces our costs.”

Justin van der Lande, the Principal Analyst at Analysys Mason, said: “Data is the energy needed to run all future business; critical to their success in creating the best AI-based insights and needs access to the largest data sets. Data sharing between enterprise partners is vital in building complete data sets. Facilitating data sharing using a secure platform, such as Nokia’s blockchain-based Data Marketplace, accelerates enterprises’ building of new data sets and creates richer business partnerships for them.”

Nokia is leading the development of security, privacy, and trust mechanisms as part of a consortium that was recently awarded the DEDICAT 6G project by the European Union. Nokia Data Marketplace inclusion in this project focuses on creating an AI and blockchain-enabled security framework and trust management platform for IoT applications running on B5G (Beyond 5G) networks.

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