Travel News

By Olusegun Koiki 

Capt. Ado Sanusi, the Chief Executive Officer (CEO) of Aero Contractors in this interview with OLUSEGUN KOIKI, spoke on the challenges of the airline, which hitherto was a leading carrier in Nigeria, plan of the management to grow its fleet and return to the top, among others. Excerpts:

The yuletide is around the corner, what is the plan of Aero Contractors’ management for the season?

We presently have a fleet size of three aircraft, but two are currently flying. Hopefully, the third would rejoin the fleet soon. We do not intend to increase our destinations during the Christmas season; we intend to make sure that we are reliable and we have pocket-friendly prices.

We understand that we are not operating in isolation and we do understand that there are lots of airlines that have brought in capacity, which is good for the market. We intend not to do that; we intend to maintain our fleet size of about three aircraft and we intend not to increase our routes, rather service the routes that we have.

Talking about investment, what is your projection for Aero Contractors’ fleet?

As for the investment, what I project for Aero Contractors is a 10 aircraft fleet operation company. So, for an investor, it depends whether he’s going to lease those aircraft or buy them outrightly and the brands of aircraft he’s going to buy. But, we can only advise and the advice is that this company will go back to its rightful position with our 10 aircraft flying.

Earlier, you said that Aero Contractors earned 14 per cent profit and reduced liabilities by 33 per cent in the financial year period, can you put figures to these percentages?

The fact is that because of tax issues, I may not be able to give you the figures, but what I know is that we made 14 per cent profit, but believe me, we are very excited about this trend of profit. Our figure as at 2022, was negative at 69 per cent.

Also, we have reduced our liabilities by 33 per cent. This is due to accrued payments and other things that we are doing. And we are saying, we will still continue to do that till we get to the level that we want.

We intend to reduce our liabilities to the best that we can, but to reduce it to zero, we need some investors to come onboard.

On the issue of reducing fares to pocket-friendly, we have looked at the market, we have seen the surplus capacity and like I said, we are not operating in isolation. I believe you are aware that about 10 aircraft have entered into the market. We have also studied the economic situation of the country and we are not insensitive to the economic hardship that is going on.

In the spirit of Christmas, which is the period of giving, we have decided to reduce our prices and we are still going to be profitable. We are not reducing our prices to a stage we will not be profitable, but everywhere in the world, you will see Christmas and Sallah sales and the reason is to give back to your loyal customers. I believe we should start doing that. We don’t intend to increase capacity at the moment, but we intend to continue to be modestly reliable to our destinations, which is more important to us.

The management of Aero Contractors planned to expand the capacity of its Maintenance, Repair and Overhaul (MRO) capacity, how far have you gone with this?

We have continued to grow the MRO; we now have Moroccan, Mongolian, Congolese, Senegalese and Ghanaian approvals for the MRO. You can see that we are expanding the MRO to accommodate the Boeing 737NG and also the Airbus 319 family. We are also increasing our capacity; we are looking at CRJs, Embraer 145, 175 and the rest. We intend to be a one-stop shop for all the airlines that are operating in the country; that is our plan. We have already started work on the Auxiliary Power Unit (APU). We have already started work to overhaul that unit. We want to domesticate the APUs and the landing gears and others. We are in talks with the manufacturers and some other people to assist us to set up the shop. The shop should be set up before the end of the third quarter of 2025.

We already have capability for top case tear for engines. We also intend to form a partnership to start overhauling of all CFR56 enginesin the near future. But as of now, we will do modular changes and do top case repair, which I don’t think anybody is doing now. We will continue to upgrade our maintenance facilities because we believe sustainability of the aviation industry requires a formidable maintenance centre in a country.

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With the recent rate of naira against the dollar, can you say you have more local airlines patronising your MRO facility?

The closing of different tiers of exchange rates by the current administration has helped a lot to make sure that airlines don’t enjoy different rates to others. Everybody goes to one source to another for the US dollars. Yes, we have seen an influx of customers into our MRO. Most of the airlines come for one maintenance or the other. Either it’s wheel and brake, pad, weaving, skin repairs, Full Operational Capability (FOC) check and others. The maintenance that the airlines could have taken out of the country, they now come to us. The unifying of the dollar exchange rate has helped to build our MRO users.

What is your view about aircraft wet leasing by domestic airlines?

Wet leasing is usually profitable for a short time, but you have to understand that you are selling your tickets in naira and you are paying per hour in dollars. So, if the dollar is fairly stable and you are meeting your projection, then, it might be profitable, but if the dollar decides to start going on a roller coaster ride, then, your pricing of your ticket will equally go on a roller coaster, too.

What Mr. Festus Keyamo, the Minister of Aviation and Aerospace Development has achieved with the Cape town Convention is quite commendable, but it is just a part of the ingredients that is needed for aviation to grow.

Why do I say that? We have the Cape Town Convention; that means that airlines can borrow money and buy airplanes or airlines can borrow money and lease airplanes or airlines can borrow money and lease finance aircraft, but there is a key factor to it, which is the interest rates.

The cost of funding in this country is very high, recently, they just increased the Monetary Policy Rate (MPR) to 27 per cent. That is stifling growth in aviation and with all the gains of the Cape Town Convention, I can’t see an airline going to borrow money at 33 to 35 per cent interest rates and then make profit.

So, it must be addressed. I am not an economist, but I don’t think in this economy, you can increase the interest rates to tame inflation. Rather, you will be killing businesses. Ninety per cent of our vendors that provide us spare parts, fueling and others, they borrow money and they borrow at exorbitant rates. So, it is actually affecting the growth of the aviation industry.

As a country, we don’t need to copy all what other countries are doing by increasing interest rates to reduce inflation, but we have to look at the peculiarity of our economy; the small-scale industry, the vendors that are supplying the airlines, what kind of funding do we have? Thirty-three to 35 per cent is not sustainable. There is no airline that can go and borrow money to refinance or to finance an airplane at 35 per cent interest rates and the dollar is N1,750 and then expect to make profit. That is a tall order for us.

Can you say the recent upgrade in infrastructure by the government has helped the airlines to carry out their operations safely, securely and comfortably in the country?

A lot has been done in recent times to assist the airlines and I think a lot more still needs to be done. You don’t just have a beautiful terminal building…The insurance is important, the Cape town Convention Practices is important, but the cost of running an airline in this country is high. We should address the multiple taxations. As a country, I think we should make a deliberate effort to see that airlines survive. We should understand why the airlines are struggling. This is very simple – multiple taxations. The airlines are trying to pay for the service the parastatals are rendering and I don’t think the airlines can fund the parastatals. It’s not possible.

So, there must be another source of funding for the parastatals because the airlines are struggling and the parastatals are struggling too to provide these services. Again, the 50 per cent outsourcing deductions in the aviation industry, I think it’s affecting us much and I believe that it should be looked at.

The Federal Government should look at aviation not as a source of revenue, but as an enabler to business and economic growth. If the Federal Government is looking at the aviation industry as a revenue provider, then, it will kill the aviation industry.

I can give you an example of Rwanda, the government understands that aviation is not bringing revenue to the country, but understands that aviation would enable it to bring tourists, Foreign Direct Investments (FDIs) and others and that is why the government has invested a lot in Rwandair. That is why it is a success story.

Quote: “As a country, we don’t need to copy all what other countries are doing by increasing interest rates to reduce inflation, but we have to look at the peculiarity of our economy…”

BY  Paul Melly

West African leaders are holding a crucial summit in Nigeria's capital Abuja, focusing on the morale-sapping departure of Mali, Burkina Faso and Niger from their 15-member bloc Ecowas.

Few think the military rulers of the three dissident states can be persuaded to pause or reverse their decision.

While faced with this blow to regional unity, West Africa is also poised to start work on a 1,028km (689 miles) highway from Ivory Coast's main city Abidjan - through Ghana, Togo and Benin - to Nigeria's biggest city Lagos.

Construction is supposed to start in 2026 and pledges of $15.6bn (£12.3bn) have already been mobilised from a range of funders and investors.

Just as Western Europe matched the Soviet-led communist bloc with a "Common Market" that later evolved into today's trading powerhouse, the European Union (EU), so Ecowas may find that a drive for prosperity and growth proves to be its most effective response to the wave of military coups and nationalism that have swept across the region since 2020.

The plan to build a modern transport corridor along the West African coast was originally approved eight years ago - long before the coups that have overturned civilian rule in Mali, Burkina Faso and Niger.

Preparatory studies, led by the African Development Bank, were commissioned.

But when these were presented last month, the timing could hardly have come at a better moment for reinvigorating the battered self-confidence of Ecowas (Economic Community of West African States).

Neither traditional diplomacy, nor sanctions, nor even the threat of military intervention in Niger, had managed to push the juntas into organising elections and restoring civilian government, as required by Ecowas governance rules.

The defiant regimes declared they would leave the 15-member bloc altogether.

They have subsequently spurned the remaining members' efforts to persuade them to stay, although the Ecowas envoy, Senegal's new, young President Bassirou Diomaye Faye, who shares their nationalistic outlook, is still trying.

Until this crisis, Ecowas was Africa's most cohesive and politically integrated regional grouping, with a creditable record of crisis management and even the deployment of peacekeepers in troubled member states.

With the departure of Mali, Burkina and Niger, the bloc will lose 76 million of its 446 million people and more than half its total geographical land area, with the loss of vast tracts of the Sahara – a painful blow to prestige and self-belief.

The shock of the three countries' withdrawal may boost those pushing for tougher governance and democracy rules.

Meanwhile, the ambitious coastal transport corridor project, conceived to support economic development, will also serve a political purpose - demonstrating the remaining member countries' capacity to work together and accelerating the trade growth and investment attraction of coastal urban West Africa, already the most prosperous part of this vast region.

And just as the EU's wealth and dynamism proved a powerful attraction for former communist states, perhaps rising prosperity across Ecowas will eventually entice the now disenchanted further north states into rejoining the bloc.

Construction of the proposed four-to-six lane motorway is forecast to create 70,000 jobs, with completion ambitiously targeted for 2030.

And the plan is to acquire a sufficiently broad strip of land along the route to later accommodate a new railway line, linking the big port cities along the Gulf of Guinea. Existing rail routes extend inland, but there is no rail line along the coast.

The road will connect many of West Africa's largest cities - Abidjan, with 8.3 million people, Accra (4 million), Lomé (2 million), Cotonou (2.6 million) and Lagos, estimated at close to 20 million or perhaps even more.

Several of the cities are key gateway ports for the flow of trade in and out of the region.

Already the bureaucratic hassles and risks of petty corruption that have so often complicated life for drivers passing from one country to the next are beginning to wane.

At many border crossings, modern one-stop frontier posts, where officials from both countries work side by side to check passports and transit documents, have replaced the assorted huts where drivers and passengers queued at a succession of counters while one set of border police and customs officers after another laboriously worked their way through the formalities.

And now the proposed highway and rail line promise to further speed the flow of trade and travel between the coastal economies, boosting competitiveness and integration and transforming the region's attraction for investors - just as the EU transformed trade and development across the European continent.

And that process of economic and administrative integration of course had enormous political consequences.

It acted as a powerful incentive for countries still outside the bloc to improve economic governance, strengthen democracy and tackle corruption, in the hope of qualifying for membership.

Perhaps Ecowas can emulate this precedent, and lure the dissident states into re-joining, particularly if flagship projects such as the transport corridor give a real fillip to growth.

For not only do Mali, Niger and Burkina face severe development and security challenges, but they are also all landlocked, and heavily dependent on their coastal neighbours, through transport, trade and labour migration.

Huge volumes of trade, formal and informal, flow across the borders.

Livestock from the three countries in the Sahel is exported on the hoof to feed city dwellers in Dakar, Abidjan and Lagos.

Onions and potatoes grown in Niger's arid climate are prized by coastal household shoppers, while Ivorian, Ghanaian and Nigerian manufactured goods are exported in the opposite direction.

Millions of Burkinabès and Malians are settled in Ivory Coast, a mainstay of the workforce for its cocoa plantations.

Moreover, the coup leaders are not pulling out of the West African CFA franc, an eight-country single currency, backed by France, that hampers competitiveness but provides a solid defence against inflation and monetary instability.

Yet these deep ties between the Sahelian countries and coastal West Africa were not sufficient to deter the military regimes in Mali, Burkina and Niger from announcing their withdrawal from Ecowas.

Hostility to the bloc, which they portray as bullying and arrogant, has paid political dividends, boosting their popularity at home. And Morocco talks of opening up an alternative trade corridor to its Atlantic ports, which could broaden the options.

But if the remaining Ecowas countries can accelerate their own drive for prosperity, pruning back trade barriers and pressing forward with breakthrough projects such as the coastal highway and rail line, then gradually they may salve today's political bruises and mistrusts and draw the Sahel states back into a reunified West African regional identity.

Paul Melly is a consulting fellow with the Africa Programme at Chatham House in London.

By Olasunkanmi Akinlotan

The manager of Gateway International Agro-cargo Airport in Ogun State, Captain Dapo Olumide, has disclosed that the Ogun State Airport is taking time to commence operation because it is working hard to ensure that it is the first in Nigeria to operate with an operating permit and not the common aerodrome certificate popular across the country.

According to Olumide, the operating permit would see the airport attaining the Encas 2023 permit, which is more stringent than the Aerodrome Certification.

Olumide stated this on Monday during the visit of the League of Airport and Aviation Correspondents in Nigeria to the facility.

The manager said, “There are some people who have said why is our airport taking so long? That an airport can be built in six months, what they don’t understand is that since the good old days of FCAA, we have what they call an Aerodrome Certificate.

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“With ENCAS 2023, it has changed now to an operating permit, and there is a difference between an operating permit and an aerodrome certificate. Even with the old Aerodrome Certificate, how many airports in Nigeria comply?

“We are the first airport in Nigeria trying to attain the status of a full operating permit; it is for that reason alone that this project is taking longer than it would have been; maybe all will be set by now, should we opt for an Aerodrome Certificate.

“What you see as open space is part of a master plan because this is also an Aerotropolis. There are going to be hotels, amusement parks, and cinemas in the future; that is all part of the master plan. You can’t put everything together in one day,” he said.

He added that the Gateway International Agro-Cargo Airport is a perfect alternative dome for flight diversion in case of bad weather conditions, saying passengers would have an easy and faster ride to Lagos from there.

The manager of Gateway International Agro-cargo Airport in Ogun State, Captain Dapo Olumide, has disclosed that the Ogun State Airport is taking time to commence operation because it is working hard to ensure that it is the first in Nigeria to operate with an operating permit and not the common aerodrome certificate popular across the country.

According to Olumide, the operating permit would see the airport attaining the Encas 2023 permit, which is more stringent than the Aerodrome Certification.

Olumide stated this on Monday during the visit of the League of Airport and Aviation Correspondents in Nigeria to the facility.

The manager said, “There are some people who have said why is our airport taking so long? That an airport can be built in six months, what they don’t understand is that since the good old days of FCAA, we have what they call an Aerodrome Certificate.

The manager of Gateway International Agro-cargo Airport in Ogun State, Captain Dapo Olumide, has disclosed that the Ogun State Airport is taking time to commence operation because it is working hard to ensure that it is the first in Nigeria to operate with an operating permit and not the common aerodrome certificate popular across the country.

According to Olumide, the operating permit would see the airport attaining the Encas 2023 permit, which is more stringent than the Aerodrome Certification.

Olumide stated this on Monday during the visit of the League of Airport and Aviation Correspondents in Nigeria to the facility.

The manager said, “There are some people who have said why is our airport taking so long? That an airport can be built in six months, what they don’t understand is that since the good old days of FCAA, we have what they call an Aerodrome Certificate.

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“With ENCAS 2023, it has changed now to an operating permit, and there is a difference between an operating permit and an aerodrome certificate. Even with the old Aerodrome Certificate, how many airports in Nigeria comply?

“We are the first airport in Nigeria trying to attain the status of a full operating permit; it is for that reason alone that this project is taking longer than it would have been; maybe all will be set by now, should we opt for an Aerodrome Certificate.

“What you see as open space is part of a master plan because this is also an Aerotropolis. There are going to be hotels, amusement parks, and cinemas in the future; that is all part of the master plan. You can’t put everything together in one day,” he said.

He added that the Gateway International Agro-Cargo Airport is a perfect alternative dome for flight diversion in case of bad weather conditions, saying passengers would have an easy and faster ride to Lagos from there.

“The critics also say Ogun State Airport is so close to Lagos that that argument is not logical for the fact that we have the longest runway here, so it suits international flights coming in with wide bodies. You can land a triple 7 here or an A350, offload your passengers, and guess how long it will take you to Lagos by road because we will arrange buses.

“When you’re diverting, the airlines communicate with us here, and they make alternative arrangements. All those BRT buses you have in Lagos, all those types of buses will be arranged. Within an hour of getting off the aeroplane here, you are already in Lagos,” he said.

Also speaking, Ogun State’s Commissioner for Transportation, Engr Gbenga Dario, noted that the airport is situated within the special agricultural processing zone and is one of the eight zones across the country. He described it as a legacy project for the Governor Dapo Abiodun-led administration.

Commissioner for Works and Infrastructure, Engr Ade Akinsanya, in his remarks, said the airport is about 95-98 per cent completed, adding that the its two fire tenders are on class 6, moving to class 7 with an additional fire tender.

“Overall, where we are today, I am pretty certain that we are ready to go commercial. Once we get the approval from the NCAA for commercial operations, we will commence. Right away, we have the approval for chartered flights already.

“The runway has been done for a long time; the fire station is done. You see the two fire tenders outside. Somehow, I don’t know how the captain did it; we got another fire tender, making it three. Right now, we are class six; with that additional fire tender, we are moving to class 7,” he asserted.

Meanwhile, members of LAAC have scored the Gateway International Agro Cargo Airport an A plus in terms of its designs and installations, affirming the airport as having the best facilities in the country at the moment.

Chairman of the league and editor of the Aviation and Transport section of the Blueprint Newspaper, Suleiman Idris, who spoke after the on-the-spot assessment of the level of work on the airport project, commended the visionary leadership of the governor, even as he affirmed that the airport project is a futuristic initiative not only for the state but for the South-West region of the country.

“With ENCAS 2023, it has changed now to an operating permit, and there is a difference between an operating permit and an aerodrome certificate. Even with the old Aerodrome Certificate, how many airports in Nigeria comply?

“We are the first airport in Nigeria trying to attain the status of a full operating permit; it is for that reason alone that this project is taking longer than it would have been; maybe all will be set by now, should we opt for an Aerodrome Certificate.

“What you see as open space is part of a master plan because this is also an Aerotropolis. There are going to be hotels, amusement parks, and cinemas in the future; that is all part of the master plan. You can’t put everything together in one day,” he said.

He added that the Gateway International Agro-Cargo Airport is a perfect alternative dome for flight diversion in case of bad weather conditions, saying passengers would have an easy and faster ride to Lagos from there.

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“The critics also say Ogun State Airport is so close to Lagos that that argument is not logical for the fact that we have the longest runway here, so it suits international flights coming in with wide bodies. You can land a triple 7 here or an A350, offload your passengers, and guess how long it will take you to Lagos by road because we will arrange buses.

“When you’re diverting, the airlines communicate with us here, and they make alternative arrangements. All those BRT buses you have in Lagos, all those types of buses will be arranged. Within an hour of getting off the aeroplane here, you are already in Lagos,” he said.

Also speaking, Ogun State’s Commissioner for Transportation, Engr Gbenga Dario, noted that the airport is situated within the special agricultural processing zone and is one of the eight zones across the country. He described it as a legacy project for the Governor Dapo Abiodun-led administration.

Commissioner for Works and Infrastructure, Engr Ade Akinsanya, in his remarks, said the airport is about 95-98 per cent completed, adding that the its two fire tenders are on class 6, moving to class 7 with an additional fire tender.

“Overall, where we are today, I am pretty certain that we are ready to go commercial. Once we get the approval from the NCAA for commercial operations, we will commence. Right away, we have the approval for chartered flights already.

“The runway has been done for a long time; the fire station is done. You see the two fire tenders outside. Somehow, I don’t know how the captain did it; we got another fire tender, making it three. Right now, we are class six; with that additional fire tender, we are moving to class 7,” he asserted.

Meanwhile, members of LAAC have scored the Gateway International Agro Cargo Airport an A plus in terms of its designs and installations, affirming the airport as having the best facilities in the country at the moment.

Chairman of the league and editor of the Aviation and Transport section of the Blueprint Newspaper, Suleiman Idris, who spoke after the on-the-spot assessment of the level of work on the airport project, commended the visionary leadership of the governor, even as he affirmed that the airport project is a futuristic initiative not only for the state but for the South-West region of the country.

“The critics also say Ogun State Airport is so close to Lagos that that argument is not logical for the fact that we have the longest runway here, so it suits international flights coming in with wide bodies. You can land a triple 7 here or an A350, offload your passengers, and guess how long it will take you to Lagos by road because we will arrange buses.

“When you’re diverting, the airlines communicate with us here, and they make alternative arrangements. All those BRT buses you have in Lagos, all those types of buses will be arranged. Within an hour of getting off the aeroplane here, you are already in Lagos,” he said.

Also speaking, Ogun State’s Commissioner for Transportation, Engr Gbenga Dario, noted that the airport is situated within the special agricultural processing zone and is one of the eight zones across the country. He described it as a legacy project for the Governor Dapo Abiodun-led administration.

Commissioner for Works and Infrastructure, Engr Ade Akinsanya, in his remarks, said the airport is about 95-98 per cent completed, adding that the its two fire tenders are on class 6, moving to class 7 with an additional fire tender.

“Overall, where we are today, I am pretty certain that we are ready to go commercial. Once we get the approval from the NCAA for commercial operations, we will commence. Right away, we have the approval for chartered flights already.

“The runway has been done for a long time; the fire station is done. You see the two fire tenders outside. Somehow, I don’t know how the captain did it; we got another fire tender, making it three. Right now, we are class six; with that additional fire tender, we are moving to class 7,” he asserted.

Meanwhile, members of LAAC have scored the Gateway International Agro Cargo Airport an A plus in terms of its designs and installations, affirming the airport as having the best facilities in the country at the moment.

Chairman of the league and editor of the Aviation and Transport section of the Blueprint Newspaper, Suleiman Idris, who spoke after the on-the-spot assessment of the level of work on the airport project, commended the visionary leadership of the governor, even as he affirmed that the airport project is a futuristic initiative not only for the state but for the South-West region of the country.

BY  Chinedu Eze

There have been several agitations from airline operators over multiple taxes imposed on flight tickets by aviation agencies, insisting that such taxes are the reasons behind the failure of many airlines in the country.

The operators decried the multiple taxation, which according to them, is fluid, confusing and exploitative, noting that when these taxes are built into the ticket, travellers tend to think that the total cost of ticket is a take home for the airlines.

Airline Operators of Nigeria (AON) at different fora have complained about the multi taxation. The operators said these taxes are stifling their operations and government seemed ambivalent in response to their call over the years.

Domestic airlines, on the average, said they pay about 35 percent to 40 per cent of a ticket cost as taxes and charges that come under the guise of statutory levies in addition to other charges.

The implemented charges range from Terminal Navigational Charges to enroute navigation charges, Over-flight charges, clearance charges, and extension charges. Even foreign airlines don’t pay enroute charges or extension charges, which the local airlines are forced to pay.

The levies are divided into aeronautical and non-aeronautical revenues and are added to charges collected from passengers as air tickets by the airlines. Twenty of the charges are paid into the coffers of the Federal Airports Authority of Nigeria (FAAN), six are paid into the Nigeria Civil Aviation Authority (NCAA) coffers, and the Nigerian Airspace Management Agency (NAMA) collects three while Bi-Courtney collects four of the charges from the airlines that operate at its terminal.

It was learn that the breakdown of aeronautic charges included aircraft inspection, which is tickets and Duty Tour Allowance (DTA) paid to the coffers of NCAA for aircraft inspection overseas. The DTA, however, depends on the country the aircraft is being inspected. Also, landing charges are divided into two; day and night. During the day, airlines pay N25 per Kg kilogramme of the aircraft weight while they are charged N37.5 per kilogramme of the aircraft at night. FAAN collects the charge from airlines (maybe this has increased).

Also, FAAN collects about N400 per weight of aircraft after 30 hours from airlines as parking charges while the agency also collects between $40 and $50 from airlines for using the AvioBridge for en-route charges, FAAN charges $70 from airlines on international routes while it collects about N3,000 for carriers on domestic routes.

AON said indigenous airlines are compelled to pay NAMA’s $75 as a charge for over-flight while it equally collects $195 from airlines that operate international or regional flights outside the country while N6,000 is remitted by indigenous airline operators for the same terminal charge. The aeronautic agency also collects clearance fees for indigenous airlines.

The operators also said that besides, N2, 500 per passenger is remitted to the purse of BASL as Passenger Service Charge (PSC) for any air traveller airlifted by airlines at the terminal.The terminal operator also collects $50 from airlines for using its Avio bridge while it collects another $50 as extended Avio bridge usage.Also, BASL collects $00.50 from operators as a check-in counter fee (as at last year).

The breakdown of the charges indicates that the NCAA collects 5 per cent of total fare from airlines as Ticket Sales Tax (TST), and another 5 per cent each as Import and Export Charges for domestic operators.

The regulatory authority also charges airlines 10 per cent each as Import and Export Royalties.

Also, FAAN collects N2,000 for domestic operations and $50 for international operations as Passenger Service Charge (PSC), and charges N12 per kilogramme as a Ports Charge.

The same agency collects N5 per kilogramme as Export Charge, N20 per kilogramme on Courier/Tarmac/ Pre-Release and N5 per kilogramme as Air Cargo.

Commenting, the Managing Director and CEO of Aero Contractors, Captain Ado Sanusi, called for a review of multiple taxes on flight ticket by aviation agencies and insisted that it is very important to streamline the payments.

“As a proposal to the federal government on these taxes, I have made several proposals. I will make one now. Let them scrap the 5 percent. Let them have a figure, one figure that airlines should be. One figure that scheduled airlines should pay. And then let NAMA have one charge. So we know we are paying NAMA and NCAA for service. And then FAAN, or we can even have one figure and then they can share among the three of them. 

“But for us to pay 5 percent, and then pay also for all the services that NCAA renders, is not good for the sustenance of airline business in Nigeria. So, I pay 5 percent of my ticket sales. And then I will pay for all the services that they will render. So if they are coming to inspect an airplane, they should pay for that. If they are going to do AOC renewal, they should pay for that. So you pay 5 percent and you pay that.

“I hope you are counting. And then you go to NAMA, you pay for enroute navigation, which I introduced (as former Managing Director) and then you pay terminal navigation.So, I think that for domestic, I think we should remove one. I think we should remove enroute and leave the terminal. I think that is that. And for FAAN, of course, we should have landing. Of course, when you land, you have to pay for it. But that can be consolidated to one tax only,” Sanusi said.

He said that the airlines have made a good presentation to the agencies and government and hoped that they would buy the recommendation of the airlines.

Sanusi said that the high taxes, the unfavourable economy have dogged at the operations of the airlines, leaving some of them in precarious state, observing that the airlines and the aviation sector cannot be insulated from the economic outlook of the country.

“You know, in any society, you cannot be more efficient than the system you operate in. So, the economic condition in the country, the aviation industry cannot operate more efficiently than the economic situation we have. So, if the economists say we are in recession, then definitely the situation of the aviation industry will be reflected in that. We are experiencing challenges in our economy, definitely there will be challenges in the aviation industry. 

“You cannot operate outside, you can’t be more efficient than the system you operate in, and we have economic challenges.So, all these issues of saying we have made progress and all that, if we are telling ourselves the truth, we have not. That is the truth, we have not. And unless we agree that we have not, and we now work towards recovering the economy and then building the aviation to have a sustainable aviation industry, I think we will just be going in a cycle and telling ourselves lies. And unfortunately, that is what is happening,” he added.

Domestic airlines have called for the review of taxes on their operations for many years and hopefully the government may begin to listen to them going forward.

… Diaspora Nigerians leverage weak naira to fly home

Airfares on domestic routes have surged by 218 percent in six months, reflecting the combined impact of high operational costs and heightened demand for travels.

As a result of the high cost of airfares, several Nigerians have been forced to cancel their Christmas travels, with some taking to road travels to save costs.

According to the National Bureau of Statistics (NBS), the average cost of airfares in commonly-flown routes such as Lagos-Abuja stood at N89,888 in June, 2024. In December, however, the cost has jumped to N285,000, indicating a 218 percent increase over a six-month period.

A major airline listed a one-way economy ticket for the Abuja-Owerri route on December 20, 2024, at N143, 000, but this later changed to N285,800.

The Abuja-Port Harcourt route has also witnessed steep increases, with a major airline charging N285,800 for an economy ticket for a December 20 trip.

BusinessDay found that some airlines charged N114, 000 to N220, 000 for the Abuja-Lagos route for a December 20 trip, but this is likely to exceed N285,000 in the coming days, according to industry players.

Some airlines priced a one-way flight from Abuja to Port Harcourt at N237,714 on a December 20 trip, with others charging between N190,095 and N210,000 for trips on December 17 to 19, 2024.

Impact on Passengers

The sharp increases in ticket prices have left passengers grappling with the high cost of air travel, especially as the holiday season intensifies demand. Rising operational expenses and insecurity in some regions have contributed to the skyrocketing fares, making domestic air travel a luxury for many Nigerians.

The surge in airfares also coincides with the holiday season, a time of high demand for domestic flights, as many Nigerians prepare to travel for Christmas and New Year celebrations. This price hike is likely to add significant financial strain for passengers planning to travel at the end of the year.

Mabel Wuku, a civil servant in Abuja, said: “My son is getting married this weekend in Kano. Normally, I’d take a bus for N12,000. But because of the road situation and insecurity problem, I spent N95,000 on a one-way flight to Kano. That’s more than half my monthly salary,” she said.

Ezenwa Joshua, a mother of three, said: “I can’t afford this, and I can’t travel on Nigerian roads with my children to such a far destination. I can’t pay ransom to a kidnapper.”

Joseph Egbe, another frustrated traveler, criticised the government for failing to address the affordability of air travel, emphasising its importance for safety and efficiency.

“The government needs to do something about it because air travel is safer and faster. In an hour, you get to your destination, but now, the high airfare is discouraging people from flying,” he said.

Exchange Rate Effect

Commenting on the cost of airfares, Festus Keyamo, minister of aviation and aerospace development, said the exchange rate impacts every aspect of aviation, including basic maintenance such as changing a tyre bolt.

Keyamo stated that to reduce ticket prices, the government will help domestic airlines acquire aircraft at a reduced rate.

“What we are therefore doing is to ensure that we expose them to the markets across the world where they can assess aircraft on very good terms. This will impact on the prices of tickets and their cost of operation,” he said.

Diaspora Nigerians leverage weaker naira

Meanwhile diaspora Nigerians are leveraging weaker naira to fly into Nigeria for Christmas, as flights from Europe, London and the United States remain fully booked.

Some airlines have also increased capacity to accommodate the influx of air passengers this Christmas.

Delta Air Lines has started daily nonstop flights on its New York JFK – Lagos route. This began in December 2024 and will continue till February 2025.

During this period, Delta transitioned from the Airbus A330-200, which accommodated 223 passengers, to the more spacious Airbus A330-900neo, capable of carrying 281 passengers.

Mary Gbobaniyi, Delta’s head of sales for West Africa, said: “This is exciting. Adding more flights to the Nigerian market could not have been better timed. Increased capacity and a larger aircraft mean more options and an elevated experience for our customers.”

Also, United Airlines increased its service between Lagos and Washington D.C., from three times weekly to daily flights, between December 4, 2024, and February 14, 2025. This reflects a 133 percent year-over-year increase in seat numbers for this period.

This will be the first time United’s service between Lagos and Washington D.C. will operate daily and the flight remains the only night-time departure from Lagos to the U.S.

“Flights arrive Nigeria from Europe, London and America full to the brim this December period as more Nigerians come home for different reasons. December has the highest weddings as a lot of people keep their events till December so that their family members will attend,” Susan Akporaiye, managing director and CEO, Topaz Travels and Tours, said.

Akporaiye, former president of NANTA, told BusinessDay that the largest concentration of Nigerians all over the world is London, USA and Europe, noting that even though the Nigerian population in Canada is also growing, the numbers don’t match up to that of London and the United States.

She said this explains why flights coming from Europe and London are fully booked this period.

She however said the current exchange rate has made some airlines restrict Nigerian travel agents from issuing tickets in naira.

“For previous years when we experienced high traffic, sales for Nigerian travel agencies were very high. Sadly for this year, even though the flights are fully booked, the tickets are not sold in Nigeria but outside the country.

“Unlike before, it was cheaper to buy tickets from Nigeria. There is still high traffic into Nigeria, but it does not translate to business for us travel agents because of the rate of exchange that is very high,” Akporaiye said.

A one way economy class ticket from Heathrow London airport to Lagos, which costs between N800,000 to N1.3 million about eight months ago now costs an average of N2.65 million this period on Egypt Air, N3 million on RwandAir, N3.25 million on Turkish Airlines, N3.5 million on Emirates, KLM and Air France, N3.7 million on Lufthansa, and N3.9 million on Qatar Airways.

For British Airways and Virgin Atlantic that operate direct flights from London to Lagos, tickets for these airlines cost about N4.2 million and N4.6 million respectively.

Yinka Folami, chief executive officer of Travel and Logistics Centre Ltd and current NANTA president, said Nigerians come from every part of the world that they live each December as they always have this attachment to home.

“This is a high season for airlines and that’s why you find that tickets are much more expensive than they would ordinarily be.”

By Sami Tunji

As Christmas approaches, Nigerians are grappling with a record-high transport inflation rate of 30.54 per cent in November 2024, according to the Consumer Price Index report by the National Bureau of Statistics.

This figure, the highest recorded this year, highlights the escalating cost of mobility for individuals and businesses alike.

Throughout 2024, transport inflation remained a pressing issue, consistently surpassing levels recorded in 2023.

In January 2024, the transport inflation rate stood at 25.92 per cent, a significant rise from 21.02 per cent in January 2023.

The rate stabilised somewhat during mid-year, averaging 25.63 per cent in May and June, before accelerating to 27.21 per cent in September, when there was an increase in fuel prices.

It reached a new peak in November, marking a year-on-year increase of 3.52 percentage points compared to 27.02 per cent in November 2023.

The surge in transport costs has been driven by a combination of economic and policy-related factors.

Chief among them is the removal of fuel subsidies, implemented shortly after President Bola Tinubu assumed office in May 2023.

This policy, while aimed at stabilising public finances and spurring economic growth, led to a sharp rise in petrol and diesel prices, which are critical inputs for road and public transport.

However, there have been controversies around the removal of fuel subsidies.

The PUNCH earlier reported that the Nigerian National Petroleum Company Limited requested an additional subsidy refund of N1.19tn for July 2024, citing exchange rate differentials on Premium Motor Spirit importation and joint venture taxes.

The report revealed that exchange rate differentials stood at N4.56tn as of June 2024 (due to under-recovery on petrol imports between August 2023 and June 2024), but this figure increased to N5.31tn by July 2024.

The NNPCL attributed the rise to fluctuations in foreign exchange rates and unresolved subsidy payments from previous months.

The total figure adds to concerns over the fiscal impact of subsidy payments on the Federation Account.

Exchange rate fluctuations and the rising cost of importing PMS have continued to strain government revenues, raising questions about the sustainability of the partial subsidy framework.

The naira’s depreciation has further compounded the situation, as the cost of imported spare parts and vehicles has risen sharply, forcing transport operators to pass on these expenses to consumers.

Seasonal factors have also played a role, with the festive period typically driving increased demand for travel.

Poor road infrastructure and limited alternatives, such as rail transport, continue to add inefficiencies and costs to the transportation sector, further inflating prices.

This year’s inflationary trends reflect broader economic challenges that have intensified since Tinubu’s inauguration.

Amidst the increasing cost burden on the government for petrol under-recovery, and despite promising to bring down the price of petrol during his campaign, President Bola Tinubu increased petrol price by about 505.71 per cent, from N175 in May 2023 to N1,060 in October 2024, inflicting more pains on the already impoverished Nigerians.

The PUNCH observed that the price of petrol was increased at least five times under Tinubu, with an increase in May 2023, another in June 2023, a further increase in September 2024, and two more in October 2024.

When Tinubu took office in May 2023, transport inflation stood at 23.87 per cent, according to data from the NBS.

By November 2024, it had escalated to 30.54 per cent, marking a significant rise of 6.67 percentage points or 27.94 per cent in 18 months.

There has also been a persistent increase in the inflation rate almost throughout Tinubu’s presidency.

In May 2023, Nigeria’s headline inflation rate stood at 22.41 per cent, according to the NBS.

By November 2024, it had escalated to 34.60 per cent, the highest level in nearly three decades, marking an increase of over 12 percentage points in 18 months.

The naira’s devaluation, from N769 per dollar in June 2023 to an average of N1,550 per dollar in December 2024, has significantly raised the cost of imported goods and services.

The Central Bank of Nigeria responded with aggressive monetary tightening, raising interest rates by 875 basis points in 2024.

Despite these efforts, the rising cost of living continues to strain households and businesses across the country.

Commuters face daily expenses that erode their purchasing power, while businesses, particularly small and medium enterprises, are grappling with increased logistics costs that inevitably translate to higher prices for goods and services.

Amid the rising cost of fuel and transportation, the NNPCL reduced its ex-depot price of Premium Motor Spirit, commonly referred to as petrol, to N899 per litre.

This decision, coming days after the Dangote Refinery reduced its price to N899, was confirmed by the Petroleum Products Retail Outlets Owners Association of Nigeria.

The new price indicates a reduction of N141, or 13.56 per cent, from N1,040 per litre sold to customers living in the Federal Capital Territory.

PETROAN’s National Public Relations Officer, Dr Joseph Obele, noted that the price reduction by the national oil firm was a response to the competitive impact of deregulation, which had led to increased competition in the downstream sector.

He expressed optimism that PMS prices would drop further before the end of January 2025, given the global decline in crude oil prices and the naira’s recent gain against the dollar.

Also, the National President of PETROAN, Billy Harry, said the price reduction would relieve motorists and Nigerians during the holiday season.

To ease transportation costs during the Christmas and New Year celebrations, Tinubu approved free train rides nationwide from December 20, 2024, to January 5, 2025.

The Federal Government also announced a 50 per cent slash in interstate transport fares for the Yuletide season to reduce travel expenses for Nigerians travelling to celebrate Christmas and New Year.

An MOU was signed between the Federal Government and key transport stakeholders, including the National Union of Road Transport Workers, the Road Transport Employers Association of Nigeria, the Association of Luxurious Bus Owners of Nigeria and God is Good Motors.

Under the arrangement, passengers departing from Abuja and Lagos (Oshodi) to various destinations across the country will pay only half the usual fare.

BY  MARI YAMAGUCHI AND ELAINE KURTENBACH

TOKYO (AP) — Japanese automakers Honda and Nissan have announced plans to work toward a merger, forming the world’s third-largest automaker by sales as the industry undergoes dramatic changes in its transition away from fossil fuels.

A merger could result in a behemoth worth more than $50 billion based on the market capitalization of all three automakers. Together, Honda, Nissan and Mitsubishi would gain scale to compete with Toyota Motor Corp. and with Germany’s Volkswagen AG. Toyota has technology partnerships with Japan’s Mazda Motor Corp. and Subaru Corp.

News of a possible merger surfaced earlier this month, with unconfirmed reports saying that the talks on closer collaboration partly were driven by aspirations of Taiwan iPhone maker Foxconn to tie up with Nissan by buying shares from the Japan’s company’s other alliance partner, Renault SA of France.

Nissan’s CEO Makoto Uchida said there had been no direct approach to his company from Foxconn. He also acknowledged that Nissan’s situation was “severe.”

Even after a merger Toyota, which rolled out 11.5 million vehicles in 2023, would remain the leading Japanese automaker. If they join, the three smaller companies would make about 8 million vehicles. In 2023, Honda made 4 million and Nissan produced 3.4 million. Mitsubishi Motors made just over 1 million.

Nissan, Honda and Mitsubishi announced in August that they would share components for electric vehicles like batteries and jointly research software for autonomous driving to adapt better to dramatic changes centered around electrification, following a preliminary agreement between Nissan and Honda set in March.

Nissan has struggled following a scandal that began with the arrest of its former chairman Carlos Ghosn in late 2018 on charges of fraud and misuse of company assets, allegations that he denies. He eventually was released on bail and fled to Lebanon.

Speaking Monday to reporters in Tokyo via a video link, Ghosn derided the planned merger as a “desperate move.”

From Nissan, Honda could get truck-based body-on-frame large SUVs such as the Armada and Infiniti QX80 that Honda doesn’t have, with large towing capacities and good off-road performance, Sam Fiorani, vice president of AutoForecast Solutions, told The Associated Press.

Nissan also has years of experience building batteries and electric vehicles, and gas-electric hybird powertrains that could help Honda in developing its own EVs and next generation of hybrids, he said.

But the company said in November that it was slashing 9,000 jobs, or about 6% of its global work force, and reducing its global production capacity by 20% after reporting a quarterly loss of 9.3 billion yen ($61 million).

It recently reshuffled its management and Makoto Uchida, its chief executive, took a 50% pay cut to take responsibility for the financial woes, saying Nissan needed to become more efficient and respond better to market tastes, rising costs and other global changes.

“We anticipate that if this integration comes to fruition, we will be able to deliver even greater value to a wider customer base,” Uchida said.

Fitch Ratings recently downgraded Nissan’s credit outlook to “negative,” citing worsening profitability, partly due to price cuts in the North American market. But it noted that it has a strong financial structure and solid cash reserves that amounted to 1.44 trillion yen ($9.4 billion).

Nissan’s share price also has fallen to the point where it is considered something of a bargain.

On Monday, its Tokyo-traded shares gained 1.6%. They jumped more than 20% after news of the possible merger broke last week.

Honda’s shares surged 3.8%. Honda’s net profit slipped nearly 20% in the first half of the April-March fiscal year from a year earlier, as sales suffered in China.

The merger reflects an industry-wide trend toward consolidation.

At a routine briefing Monday, Cabinet Secretary Yoshimasa Hayashi said he would not comment on details of the automakers’ plans, but said Japanese companies need to stay competitive in the fast changing market.

“As the business environment surrounding the automobile industry largely changes, with competitiveness in storage batteries and software is increasingly important, we expect measures needed to survive international competition will be taken,” Hayashi said.

Federal Government of Nigeria has declared public holidays to mark Christmas and New Year festivities nationwide.

The Federal Government has announced December 25 and 26, 2024, as well as January 1, 2025, as public holidays to mark Christmas, Boxing Day, and New Year celebrations, respectively.

The announcement was made by Olubunmi Tunji-Ojo, Minister of Interior, in a statement signed by Magdalene Ajani, the ministry’s permanent secretary. Tunji-Ojo extended festive greetings to Nigerians, encouraging them to use the season to reflect on the values of love, peace, and unity.

“The Christmas season is a good moment for both spiritual reflection and national renewal. As we celebrate the birth of Jesus, the Prince of Peace, let us demonstrate kindness and extend goodwill to one another, irrespective of our differences,” the statement read.

He further urged Nigerians to foster harmony and strengthen family and community bonds during the yuletide. The minister emphasised the importance of remaining committed to the peace, unity, and progress of the nation, assuring citizens of the government’s dedication to ensuring security and prosperity across the country.

Tunji-Ojo also expressed confidence in the Renewed Hope Agenda of President Bola Tinubu’s administration, which he said would drive economic prosperity and make Nigeria a global model of success.

Faridah Abdulkadiri