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Domestic Airlines Record Decline in Patronage

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Aero contractors
  • Domestic Airlines Record Decline in Patronage

Despite the expected increase in flight operations in the first quarter due to the general elections, domestic airlines recorded a decline, MAUREEN IHUA-MADUENYI writes

Domestic flight operations in the first quarter of this year recorded a decline when compared with the preceding quarter as well as the same quarter in 2018, investigations have shown.

Figures obtained from the Nigerian Civil Aviation Authority showed that the nine domestic airlines operating in the country, jointly operated 14, 735 flights from January to March, about 10.95 per cent lower than the 16,546 flights operated between October and December 2019.

Aero Contractors, Arik Air, Azman Air, Dana Air, Med-View Airline, Overland Airways, Air Peace and Max Air operated 5, 420 flights in January; 4, 289 in February and 5, 026 flights in March while in the last quarter of 2018, the airlines operated 5, 398 in October, 5, 408 in November and 5, 740 flights in December.

Against expectations that the general elections would be a busy period for airlines, the number of flights operated in the first quarter, when compared with the same period of 2018, only showed a marginal increase of 0.56 per cent from the 14, 653 flights recorded between January and March, 2018.

International airlines were also not left out in the decline as the 36 operators had a combined 3, 872 flights compared with the 4, 055 recorded in the last quarter of 2018 but higher than the 3, 757 flights operated in the first quarter of 2018.

Delayed flights for domestic airlines, however, showed improvement, dropping from 8, 825 in the first quarter of 2018 to 7, 926 in 2019, while cancelled flights also dropped from 208 to 181 in the first quarters of 2018 and 2019 respectively.

Although flight operations around January and February are known to be fewer than the months of November and December when people travel more, aviation analysts had predicted a rise in both flight operations and a number of passengers for domestic operators, riding on the back of the 2019 general elections.

But, the reverse was the case, which according to airline operators, was largely due to the postponement of the elections, which necessitated the cancellation of close to 150 domestic flights in March alone.

The Corporate Communications Manager, Air Peace, Mr Chris Iwarah, said the period between January and March was generally considered a lean period in global aviation but that the 2019 elections also had a huge impact on flight operations, albeit negatively.

He said, “Flights around that period come with disruptions before picking up again around March, especially from weather-related issues but the general elections had a huge impact when it was postponed.

“It affected flights negatively to a large extent, but of course, it was a sacrifice we all had to make; you must have leaders before talking about business.”

The Media and Communications Manager, Dana Air, Mr Kingsley Ezenwa, explained that flight operations fluctuated throughout the first quarter.

According to him, people did not travel as much as was expected during the elections.

“At some point, it peaked, at some other time, it was really low. It fluctuated all through; it was not as if operations were at an all-time low during the period. As an election year, there were expectations of an increase in flight operations but nothing spectacular happened. That period, people were careful about their movement, so the insecurity also affected operations, but it was not completely bad,” he said.

It was also gathered that apart from the general elections, some airlines had taken a number of aircraft from their fleet for maintenance which reduced the number of flights they operated during the period.

“Capacity was low; so many aircraft were taken out of service for checks and maintenance,” Ezenwa stated.

The International Air Transport Association in its global passenger traffic results for the months of January, February and March had noted that there were continued concerns about Africa’s largest economies, South Africa and Nigeria, contributing to the slowdown of air traffic in the first quarter.

Aviation Analyst, Mr Olumide Ohunayo, said the postponement of the elections disrupted not just flight operations but other businesses as well.

He said, “Generally after the festive period, it is the norm here that from January to February, the corporate world is expected to pick up gradually but unfortunately the elections came and necessitated restrictions in movement and activities.

“Coupled with the postponement, it made mincemeat of all economic activities; commercial travel was no exception. During that period, air fare became ridiculously low with numerous promos for people to fly. The last election was also tensed with heightened ethnicity issues on the ground. So it had businesses grounded so also were social activities. Once these concomitants abound, air travel suffers.”

Ohunayo also stated that apart from the disruptions occasioned by the general elections, in the first quarter of the year, there were rumours of an increase in fuel pump price, which created anxiety in the economy.

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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N1.3bn Fraud Allegation: Court Orders Arrest of Dana Air MD For Not Showing Up For Arraignment

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Mr. Hathiramani Ranesh

A Federal High Court in Abuja has ordered the arrest of the Managing Director of Dana Air, Mr. Hathiramani Ranesh for failing to appear in court for his arraignment in the alleged N1.3 billion fraud preferred against him by the Office of the Attorney-General of Federation (AGF).

The Federal Government had on October 10, 2024, asked the court to issue a bench warrant for the arrest of Dana Air after failing to honour invitation for his arraignment.

The AGF had filed a six-count charge against Ranesh and two others and marked Dana Group PLC and Dana Steel Ltd as the 2nd and 3rd defendants, respectively.

The prosecution argued that Ranesh and the two companies, along with others still at large, committed a felony between September and December 2018 at the DANA Steel Rolling Factory in Katsina.

They were accused of conspiring to remove, convert, and sell four units of industrial generators—three units Ht of 9,000 KVA and one unit of 1,000 KVA—valued at over N450 million. These assets were reportedly part of the Deed of Asset Debenture used as collateral for a bond, which remains valid.

The defendants and others at large were said to have conspired to fraudulently divert N864 million between April 7th and 8th, 2014, at House No. 116, Oshodi-Apapa Expressway, Isolo-Lagos.

This sum, reportedly part of the bond proceeds from Ecobank intended for revitalizing production at Dana Steel Rolling Factory in Katsina, was allegedly diverted for unauthorized purposes.

They were also accused of conspiring to transfer N60,300,000 to an Atlantic Shrimpers account (No: 0001633175) at Access Bank, fraudulently diverting funds earmarked as part of the Ecobank bond proceeds for resuming production at the Katsina factory.

The cumulative amount involved in the charge totals N1,374,300,000. Each offense is said to be contrary to and punishable under Section 516 of the Criminal Code Act, Laws of the Federation of Nigeria, 2004.

After Mojisola-Okeya Esho, counsel to the Federal Government, had requested for bench warrant to be issued against Ranesh, the defence lawyer, B. Ademola-Bello, disagreed with Esho, saying that they had filed a preliminary objection challenging the jurisdiction of the court to hear the matter and that the prosecution had already been served.

Delivering ruling on the application, Justice Obiora Egwuatu, agreed with Esho that Ranesh’s arrest was necessary due to his failure to appear in court despite being served with the charge and several proceedings having taken place.

Justice Egwuatu held that, according to Section 184 of the Administration of Criminal Justice Act (ACJA), 2015, the court has the authority to issue an arrest warrant against any defendant who fails to attend court sessions.

Egwuatu ordered that Ranesh must appear before the court on January 13, 2025, before any objections can be raised.

Consequently, he adjourned the matter till January 13, 2025, for hearing.

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Persistent Service Disruptions In Banks Paralyze Activities At Ports, Many Cargoes Trapped 

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Lekki Deep Seaport

Activities at the Apapa and Tin-Can Ports in Lagos State have been paralyzed as cargoes have remained uncleared following persistent disruption to some online services of some commercial banks in Nigeria.

It was gathered that the banks suffer network problems due to the upgrade of their electronic banking portals.

To this end, business moguls have been unable to pay the Customs duty necessary for the clearance of their cargoes at the ports.

A visit to the ports showed that many import units of containers have not been cleared because their clearance documents are still trapped in some banks due to ongoing network migration issues.

If the banking disruptions persist and cargoes continue to lie fallow at the ports, experts have said that prices of goods at Nigerian markets may soar.

Many persons who have been working at the ports have also been rendered jobless as activities at the ports remain in limbo.

Confirming the situation at the ports, the National President of the Africa Association of Professional Freight Forwarders and Logistics of Nigeria (APFFLON), Mr. Frank Ogunojemite said many jobs are stuck because agents have been battling to settle payment part of their clearance schedules.

Ogunojemite revealed that the clearance of cargoes at the ports usually goes through Form M and the Pre Arrival Assessment Report (PAAR), said agents have to go through a commercial bank to pay their Customs duty before any clearance process can be done.

He said if the banking system or network is down, it will be impossible for Customs duty to be paid and that container will remain in the port accumulating rent which comes with storage and demurrage payments.

According to him, prices of goods may soar if the situation persists as cargo owners spend more for clearance if their containers spend longer time in the ports.

Preferring solutions, he called on government to introduce ‘compensatory law’ where importers are given waivers when delays to their cargoes inside the ports is not from them.

Also, haulage operators bemoaned the effect of the various banking migrations on picking of containers inside the ports.Persistent Service Disruptions In Banks Paralyze Activities At Ports, Many Cargoes Trapped

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Nigerian Businesses Face Tougher Times as PMI Drops to 19 Months Low of 46.9

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Nigerian businesses continued to face headwinds as the Purchasing Managers Index published by Stanbic IBTC shows a 19-month low. 

According to the report released on Friday, business conditions took a hit and PMI dipped from 49.8 points in September to 46.9 points, the steepest decline since March 2023.

For context, a PMI reading above 50 points indicates growth in business activity. Conversely, a reading below 50 points indicates contraction, suggesting deterioration consequent to an economic downturn.

According to the report, businesses faced pressures from the local currency weakening, higher fuel prices and increasing cost of transportation.

This has also forced the hands of businesses to increase prices to sustain operations, which the report stated has led to a reduction in new orders and business activity.

Most importantly, confidence in the business sector plummeted to the worst ever since the organisation started documenting PMI in 2014.

“Overall input costs rose at one of the sharpest rates on record, with selling prices increased accordingly. This resulted in marked reductions in new orders and business activity, while business sentiment was the lowest in the survey’s history,” the report read in part.

A positive light in the report was that some companies managed to add a few new hires, extending a six-month trend of job creation. The downside to this was that the companies employed these staff on a short-term basis.

The report also stated that companies are making efforts, now more than ever, to help their staff stay afloat in the current economic situation.

“Meanwhile, efforts to help workers with rising living costs meant that staff pay was increased to the greatest extent in seven months,” the report added.

Metrics like the private sector output, volume of orders, and quantities of purchases made by customers all recorded steeper values than they did in September.

Trends showed that prices, cost of staff maintenance and input prices, on the other hand, recorded very sharp increases, with some metrics posting record hikes since March 2023.

Inflation in the general Nigerian macro environment is telling in every quarter and businesses are not exempt.

Analysts told Investors King that special interventions will help ease the pressure on companies, but warned that risky conditions attached to these measures may scare off firms from accepting them.

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