Connect with us

Markets

Experts Warn against Sale of Aero, Arik to Foreign Airlines

Published

on

Arik Airplane
  • Experts Warn against Sale of Aero, Arik to Foreign Airlines

Aviation industry experts have cautioned against alleged plan by the federal government through Asset Management Corporation of Nigeria (AMCON) to sell Aero Contractors and Arik Air to foreign airlines.

Informed sources at the Ministry of Transportation had hinted that the government approached Ethiopia Airlines and Turkish Airlines to buy Arik but they declined. Also last week the Minister of Finance, Mrs. Kemi Adeosun confirmed that investors were making enquiries about acquiring the two airlines.

But industry experts have expressed worries about the news of the plan takeover of these airlines by foreign concerns, querying if how this would benefit Nigeria and make the airlines operate profitable.

They argued that if foreign airlines acquire and absorb these airlines, Nigeria would lose because the workers would be relieved of their jobs and the airlines may even seize to exist as Nigerian operators.

Secretary of Aviation Round Table (ART), Group Captain John Ojikutu has criticised the move, saying that the decision to sell the airlines to European carriers is ill-advised.

“The news going round is that there are some moves by AMCON to liquidate Arik airline and sell it to the Ethiopian airline. Sure AMCON has no good knowledge on how many things work in aviation, but must be getting some blind advice from some Nigerian interested parties. I am not against the selling of Arik or Aero to technical investors, what I, like any other Nigerian, should fight for is selling a reasonable percentage of the airlines assets to the public. Secondly, those who are contemplating the sales or cooperation with Ethiopian airline should go into history of such cooperation in the past between Nigeria Airways and KLM or the Nigeria Airways and South African Airways in the 90s and the one for establishing Virgin Nigeria between the government and Virgin Atlantic.

“In the event that the liquidation and sale of these airlines to Ethiopia Airlines or European carriers is true, what would be the statutes of the airline if Nigerians are not participants? Would Ethiopian Airlines and Asky still retain their multiple destinations to all the five Nigerian airports if the airline is designated as the national carrier or flag carrier? We must find favourable answers to these questions or else AMCON and its advisers would blindfully sell our birth rights to a commercial competitor in the industry,” Ojikutu said.

Travel expert, Ikechi Uko said if selling the airlines would make them viable that would be good for Nigeria, but there is no certainty that after the sale the airlines would be allowed to operate as they are but if that would be the case because “if Turkish Airlines acquire the airline, it cannot bring Turkish people to run it; it will allow Nigerians to run the airline.”

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.

Markets

OPEC Agrees to Increase Oil Supply by 500,000 Barrels Per Day Ahead of Surge in Demand

Published

on

Nigeria's economic Productivity

OPEC and allies finally agreed to ease their 7.7 million barrels per day production cut by 500,000 barrels per day starting from January 2021.

This will now bring the oil cartel’s total production cuts to 7.2 million barrels per day starting from next year.

Oil prices rose after the news as the market believed the approval of Pfizer COVID-19 in the United Kingdom will kick start a series of approvals and helped restore confidence, increase business activities and demand for the commodity across the globe.

After the outcome of the meeting was made public on Thursday, Brent Crude Oil against which Nigerian oil is priced gained 1.35 percent on Friday after gaining 1.4 percent on Thursday to $49.37 per barrel at 11.35 am Nigerian time on Friday.

The US West Texas Intermediate gained 1.29 percent to $46.23 barrel on Friday.

500,000 bpd from January is not the nightmare scenario that the market feared, but it is not what was really expected weeks ago,” said Rystad Energy senior oil markets analyst Paola Rodriguez Masiu. “Markets are now reacting positively and prices are recording a small increase as 500,000 of extra supply is not deadly for balances,” she added.

Investors King increased business sentiment in the energy sector to boost investment, increase activity in the sector and most important improve crude oil demand enough to accommodate the 500,000 barrels per day extra that would be hitting the global market starting from January.

Continue Reading

Markets

Communities in Delta State Shut OML30 Operates by Heritage Energy Operational Services Ltd

Published

on

Oil

The OML30 operated by Heritage Energy Operational Services Limited in Delta State has been shut down by the host communities for failing to meet its obligations to the 112 host communities.

The host communities, led by its Management Committee/President Generals, had accused the company of gross indifference and failure in its obligations to the host communities despite several meetings and calls to ensure a peaceful resolution.

The station with a production capacity of 80,000 barrels per day and eight flow stations operates within the Ughelli area of Delta State.

The host communities specifically accused HEOSL of failure to pay the GMOU fund for the last two years despite mediation by the Delta State Government on May 18, 2020.

Also, the host communities accused HEOSL of ‘total stoppage of scholarship award and payment to host communities since 2016’.

The Chairman, Dr Harrison Oboghor and Secretary, Mr Ibuje Joseph that led the OML30 host communities explained to journalists on Monday that the host communities had resolved not to backpedal until all their demands were met.

Continue Reading

Markets

Crude Oil Recovers from 4 Percent Decline as Joe Biden Wins

Published

on

Oil Prices Recover from 4 Percent Decline as Joe Biden Wins

Crude oil prices rose with other financial markets on Monday following a 4 percent decline on Friday.

This was after Joe Biden, the former Vice-President and now the President-elect won the race to the White House.

Global benchmark oil, Brent crude oil, gained $1.06 or 2.7 percent to $40.51 per barrel on Monday while the U.S West Texas Intermediate crude oil gained $1.07 or 2.9 percent to $38.21 per barrel.

On Friday, Brent crude oil declined by 4 percent as global uncertainty surged amid unclear US election and a series of negative comments from President Trump. However, on Saturday when it became clear that Joe Biden has won, global financial markets rebounded in anticipation of additional stimulus given Biden’s position on economic growth and recovery.

Trading this morning has a risk-on flavor, reflecting increasing confidence that Joe Biden will occupy the White House, but the Republican Party will retain control of the Senate,” Michael McCarthy, chief market strategist at CMC Markets in Sydney.

“The outcome is ideal from a market point of view. Neither party controls the Congress, so both trade wars and higher taxes are largely off the agenda.”

The president-elect and his team are now working on mitigating the risk of COVID-19, grow the world’s largest economy by protecting small businesses and the middle class that is the backbone of the American economy.

There will be some repercussions further down the road,” said OCBC’s economist Howie Lee, raising the possibility of lockdowns in the United States under Biden.

“Either you’re crimping energy demand or consumption behavior.”

Continue Reading

Trending