Travel News

By Nivedita Balu

TORONTO (Reuters) - More Canadian homeowners are considering switching to variable rate from fixed rate mortgages after an unusually large interest rate cut by the central bank on Wednesday, mortgage brokers said.

The Bank of Canada cut its benchmark policy interest rate by 50 basis points to 3.75%, giving some relief to homeowners after mortgage payments shot up in recent years and increased overall living costs.

Higher borrowing rates helped fuel a housing affordability crisis that has been exacerbated by a record influx of immigrants and not enough homes for them, hurting Prime Minister Justin Trudeau's popularity.

Most mortgages in Canada renew every three or five years and amortize over 20 or 25 years, exposing Canadians to rising rates. In the United States, homeowners can enjoy a fixed rate for the entire life of a 15-year or 30-year mortgage.

Canadians predominantly have either fixed-rate mortgages, which are influenced by bond prices, or variable-rate mortgages, which benefit as policy rates decline.

Andy Hill, a mortgage broker in Vancouver and founder of mortgage rate comparison website EveryRate.ca, said more than a dozen clients reached out in the past week looking to make a switch from fixed to variable mortgages, as Canada's largest rate cut since the COVID-19 pandemic was widely expected.

His calculations show switching would save on average C$4,500 ($3,252) for a mortgage of C$400,000, even after fines of up to C$4,800 to break the mortgage and switch.

by  Chinedu Eze

The federal government may shut down Akanu Ibiam International Airport, Enugu for the rehabilitation of the runway, to make it safe for air travellers.

The airport which is the only facility that services international flight operations in the South-east may be shut down the third time, if government finally decided that the comprehensive work needed to put the runway in the best shape is to be done.

Runway is a safety critical infrastructure, which must be in good condition for aircraft to operate but experts versed in runway engineering say that there could be other ways of reconstructing it without wholly closing the airport.

The airport serves many people who live in Anambra, Benue, Ebonyi, Enugu and Abia states. So, the closure will have major negative impact in the movement of the people, especially now travelling long distance by road is being discouraged due to insecurity.

“They are going to close the runway again. I can confirm that to you. What is worrying about it is that the governor of the state has shown a lot of commitment to that airport and closing it will constrict the state’s economic activities. That means that Nigerians will suffer again like the many times it was closed in the past for the same purpose.

“The runway breaking down now means that the quality of work done in the past is questionable; yet, so much money was voted for its rehabilitation. It doesn’t mean that they cannot use night time alone to repair it or close it on weekends; after all, runway at Gatwick Airport, London was rehabilitated recently but it was done in the night and it served flights during the day. But closing the airport is about our type of administrative system,” an insider who was head of aviation agency and witnessed the rehabilitation of the runway in 2019, said informed sources.

In 2020 when the airport was reopened after the work on the runway, the former Minister of Aviation, Hadi Sirika, assured that that remedial work would be carried out from time to time on the runway, so that the airport would not be closed again over the same issue.

“FAAN management has been given the mandate to ensure that periodic maintenance is carried out diligently so that we will not have to go through a painful experience of closure again. May I ask the government and people in this region to increase their commitment by using this airport to the fullest of its capacity? This airport will be placed in concession to ensure value for money,” the then Minister had said.

Sirika disclosed at the reopening of the airport that he approved N10 billion as special funding for the rehabilitation of the airport, and that former President Mohammadu Buhari showed how dedicated he was towards the infrastructural development of the South-east.

Like what is happening now, there was a lot of contemplation before the airport was finally closed in 2019 for the rehabilitation because of the critical role the airport plays in the South-east.

A major operator to the airport, Air Peace, supported the closure of the airport then because of the bad runway and expressed hope that after comprehensive rehabilitation, the runway would be in excellent shape for safe and smooth flight operation.

The Chairman and CEO of Air Peace, Dr. Allen Onyema, explained then that the closure was necessary to ensure safety of flight operations to the route.

“The management and staff of Air Peace wish to commend the federal government for the decision to close the Akanu Ibiam Enugu International Airport in order to allow proper repair and maintenance of the airports runway which has given us serious safety concerns.

“For the avoidance of doubt, Air Peace is fully and totally in support of this decision. Though the decision will affect the traveling public and, of course, the airline, we place the safety of the flying public, our crew and equipment above any commercial benefits,” Onyema said.

He urged the government to go all out to put everything in place, within the period of the closure that would make the airport rank among the best international airports in the country.

“We plead with the federal government to make the airport a 24 hours flight operations airport by improving the night landing infrastructure,” Onyema had further urged.

But just four years down the line, government is thinking of closing the airport again. It was then reconstructed by PW Nigeria Limited, a company, which has reputable experience in airport runway construction.

A FAAN official told THISDAY that the problem with the Enugu airport runway had been the issue of soil, adding that after it has been rehabilitated, continuous landing of aircraft weakens it and over time it needs to be rehabilitated again.

“The soil where the runway is built is soft; so, the impact of aircraft landing softens it and it gives way over time. But if they want to build everlasting infrastructure, they should do heavy concrete groundwork and then use asphalt on top, the way they did that of Abuja airport. That will prevent the current intermittent effort of rehabilitating after every few years, which disrupts flight operations. If you close the airport now, it will affect the economic activities of so many people,” he said.

However, the public affairs of the Federal Airports Authority of Nigeria (FAAN) told THISDAY thatt the plan to close the airport has not been communicated officially.

But the spokesperson of the Akanu Ibiam International Airport, Enugu, Mrs. Josephine Ajara, told THISDAY that remedial work has been on-going on the runway and that there would be no announcement for the airport closure for a more comprehensive rehabilitation.

It is the opinion of many that the airport should not be closed again; rather, a different system should be adopted to rehabilitate the runway while it still provides service, as other countries do.

P.W. Nigeria Ltd. has now over 45 years of experience working in Nigeria, and throughout the West Africa region. P.W. Nigeria Ltd. has an extensive modern fleet of construction equipment and a team of highly trained and professional staff. It is highly committed to the continued development of Nigeria.

By Olasunkanmi Akinlotan

The Minister of Aviation and Aerospace Development, Festus Keyamo, has said the aviation industry has a high mortality rate, which caused the demise of over 100 airlines in the last 40 years.

Keyamo disclosed this during the 10th anniversary of West Africa’s largest airline and Nigerian flag carrier, Air Peace in Lagos on Saturday.

The minister, however, promised that the current administration would end the incessant death of airlines.

He said, “I am excited to be here today for two reasons. First is that Air Peace has survived for 10 years and keeps thriving. If you look at the history of airlines in Nigeria, you will discover that it is difficult for them to survive 10 years and still look healthy. We have a history of great mortality of airlines.

“More than a hundred airlines have gone in the last 40 years and I know you all remember. From Concord to Zenith to Bellview, among others. You will then ask yourself why they die off, I can keep mentioning them because I have their list with me.

“So when we came to office we said there must be something responsible for this high mortality rate and now we have Air Peace looking strong and has continued to be on the rise and not on the decline.” 

Keyamo noted that the “situation is worrisome. Let me tell you why it is a thing of worry. A recent study by Boeing says that Nigeria accounts for 80 per cent of domestic travel in the whole of Africa. Not West Africa, not Central Africa, but the whole of Africa.

“The busiest route in the whole of Africa is the Lagos-Abuja route; that is, in the entire Africa. I think it is followed by Johannesburg-Cape Town. But Nigeria is number one in terms of domestic travel.

“We have the population, we have the traffic, we have the people. So it is surprising that if we have this traffic, why are the airlines not surviving? Ask yourself. Why are they not surviving? And together, since we assumed office I have sat down with operators to solve this problem and I listen to them.”

Keyamo said it has become reassuring that the 10-year-old Nigerian carrier, Air Peace, has defied the high mortality phenomenon, which happens to airlines with their first five to 10 years of operation, “indicating that it will be a great carrier of the future.”

The Chairman of Air Peace, Allen Onyema, said the airline is a product of deep thinking and the desire to positively impact the country by creating jobs for the teaming Nigerian youths and not primarily to make profits.

“Air Peace is a product of deep thinking and a desire to make a far-reaching impact in a country I love deeply. Like most businesses, profit is an important motive; however, with Air Peace, profit was not the primary driving force behind its establishment,” he stated

Northern Nigeria has been plunged into darkness for nearly two weeks. Engineers have been unable to carry out repairs due to insecurity. The Transmission Company of Nigeria says gunmen are occupying the area where the line is damaged. The power supply is crippled in 19 of Nigeria's 36 states, depriving millions of electricity and paralysing economic activity. There are now plans to deploy troops to the affected areas. 

Also in this edition:

UN Secretary-General Antonio Guterres warns Sudan's 18-month war could "ignite regional instability from the Sahel to the Horn of Africa to the Red Sea". He says the Sudanese people are living through "unspeakable atrocities" and that 750,000 of them are facing "catastrophic food insecurity" and famine conditions in North Darfur displacement sites. We hear from Tom Perriello, the US special envoy for Sudan.

Finally, French President Emmanuel Macron gets a standing ovation at the Moroccan parliament during a state visit, after confirming France's decision to back Moroco on Western Sahara.

By Olasunkanmi Akinlotan

Leading aircraft manufacturer, Boeing, is facilitating the leasing of aircraft to Nigerian airlines in the next 24 months.

The information was shared in an invitation letter addressed to Festus Keyamo, the Minister of Aviation and Aerospace Development. The letter was sent to selected financial institutions in Nigeria, members of the Airlines Operators of Nigeria, as well as aircraft financiers and lessors. It was issued by the Commercial Sales Director of Boeing, Moore Ibekwe and was obtained by our correspondent on Tuesday.

The purpose of this meeting is to find a lasting solution to the aircraft shortage in the country.

“On our side, we are coordinating the efforts with lessors to firm up dates and timing for these meetings. We would like to keep the delegation small and focused on Nigerian airlines seriously considering leasing aircraft in the next 24 months. It is important that the airlines we bring to the forefront are prepared so that we can demonstrate real business opportunities to keep the attention of the lessors,” Ibekwe stated.

It will be recalled that the minister had in August visited the head office of the aircraft manufacturer to secure aircraft leasing for Nigerian airlines.

The PUNCH gathered that to earn the support, a list of requirements was read to the minister, which included the signing of the Cape Town Convention and the Irrevocable Deregistration and Export Request Authorisation Advisory Circular for the recordation and cancellation of leased aircraft in the country.

Both documents had been signed by the Federal Government and the Nigeria Civil Aviation Authority.

In response to this development, Ibekwe said, “I want to thank and commend you for the efforts of the Ministry of Aviation and Aerospace Development, under your leadership, to improve the lives of Nigerians through an improved aviation industry. Following your visit to our facilities in the United States, the press coverage on Nigerian aviation has been remarkably positive like never before seen, therefore, we need to capitalise on the positive momentum in the spirit of the MoU.

“During your visit, one of the follow-up items was to organise a forum during the Airline Economics whereby we can leverage our relationships with leasing companies’ leadership for you to meet them and update them personally on the strides that the Federal Government of Nigeria is undertaking to improve the aviation industry.

As we all agreed, in the presence of our Senior Vice President of Sales, it would be best if they heard from you firsthand.

 “We have also been working with several banks in Nigeria and Africa Trade Investment Development Insurance to develop a credit enhancement product specifically for Nigeria to facilitate operating leases by providing an additional layer of security to global lessors who may have shown interest in the region.”

The aircraft manufacturer stated it envisaged a forum that would include the ministry, AON representatives, Nigerian banks, lessors/financiers and Boeing to chart a course for a new future for Nigerian aviation.

By Olasunkanmi Akinlotan

Following the unsuccessful attempts to establish a national airline after the defunct Nigerian Airways, the government has stepped up efforts to create a new national carrier. Aviation industry experts have proposed various strategies to turn this vision into reality, OLASUNKANMI AKINLOTAN writes

Nigerians recall how the government’s bid to launch Nigeria Air in the final days of former President Muhammadu Buhari’s administration ended in disappointment. Having been without a national carrier for over two decades after Nigeria Airways stopped operating in 2003 and was liquidated in 2004. The government decided to liquidate the airline due to its declining performance and debts.

After several promises to give Nigerians a national carrier, former Nigerian Aviation Minister Hadi Sirika officially unveiled Nigeria Air in Abuja on May 27, 2023, just 48 hours before the end of his tenure.

The minister had previously disclosed that Nigeria Air would begin operation before the swearing-in of a new administration on May 29, 2023. However, the airline did not start operations in April 2022 as planned.

After the unveiling of Nigeria Air on May 27, 2023, reports emerged that the minister had chartered an Ethiopian Airlines aircraft for the launch.

In response to the allegation, the minister, in an interview on AriseTV, noted that the agreement was for “the takeoff of the airline three aircraft in the name of Nigeria Air will commence the operations once the AOC is ready” but that an aircraft had to come in as part of their marketing strategy, which he said was the wishes of the owners of the airline.

He confirmed that the aircraft was internationally registered and that they could not have kept an airline on the ground when it was not ready to take off.

He added, “Ethiopian people are masters of the game,” suggesting they purposely did not keep an aircraft air until they started operations.

In July this year, Serika’s successor, Festus Keyamo, disclosed that the Nigeria Air project remained suspended.

The minister spoke through his Special Assistant, Tunde Moshood, while reacting to Ethiopian Airlines’ latest comment on the matter.

“They can say whatever they like, but as far as we are concerned, the project is under suspension and the honourable minister is awaiting Mr President’s verdict on it. They can say what they like, but our current position on the matter is what I just said to you,” Moshood said while reacting to the Ethiopian national carrier’s comment on the matter.

The Ethiopian Airlines Group Chief Executive Officer, Mesfin Tasew, had told a news outlet, the Ethiopian Tribune, that the Nigerian government was no longer interested in the project.

“The Nigerian government has lost interest in partnering with a foreign airline,” Tasew said.

The announcement by Ethiopian Airlines came barely two months after the Federal Government reaffirmed the indefinite suspension of the controversial Nigeria Air project.

Keyamo had previously criticised the deal with Ethiopian Airlines as unfair to Nigerian airlines, stating it would be irresponsible for the Federal Government to allow a foreign entity to monopolise Nigeria’s aviation industry, thereby compromising the growth of local businesses.

The national carrier, which was first unveiled at the Farnborough International Airshow in London in 2018, was officially unveiled and expected to operate under a shared ownership arrangement between the Federal Government, shareholders and a partnering airline, Ethiopian Airlines.

The plan was for the Ethiopian airline to manage its operations under a management contract, aiming to connect the local Nigerian market with international markets and destinations.

Displeased by the formation of the carrier, the Airline Operators of Nigeria dragged the Nigerian government to court. The AON said it engaged in a legal battle with the government not because it was bitter or fears competition but rather because it wanted all business dealings by the government and private initiatives on the national carrier project to show fairness, equity, and transparency.

In 2022, a Federal High Court in Lagos issued an order of interim injunction restraining the Nigerian government from establishing its proposed national carrier.

The temporary injunction was given in a suit marked FHC/L/CS/2159/2022 and filed by registered trustees of the AON, Azman Air Services Limited, Air Peace Limited, Max Air Limited, United Nigeria Airline Company Limited, and Top Brass Aviation Limited, as the plaintiffs.

In August, the Federal High Court in Lagos agreed with AON and halted the sale of Nigeria Air to Ethiopian Airlines. The court declared null and void the sale of the shares of Nigeria Air to Ethiopian Airlines after determining the issues in the suit.

Justice Ambrose Lewis-Allagoa ordered that the Federal Government’s plans to establish a national carrier, Nigeria Air, should be halted.

After large-scale irregularities were discovered in the whole process, the Federal Government had earlier stopped the process.

However, in a new twist, the Asset Management and Corporation of Nigeria has mooted the idea for Arik and Aero Contractors airlines, which are under its management, to be merged and converted into a national carrier.

An official of AMCON, who spoke on the condition of anonymity, claimed the merger of Arik and Aero Contractors was one of the simplest ways of bringing the national carrier dream to reality.

The source revealed that AMCON was selling the merger idea to the Federal Government afresh.

These experts believed that merging the airlines for the purpose of the national carrier would not only put the issues of the humongous debts behind; it would also help the Federal Government’s quick start of the airline as it would save the government the financial commitment of purchasing new aircraft.

“The former management of AMCON presented the idea of converting Arik and Aero to a national carrier. But the former aviation minister did not buy the idea. We will present it again because that is the best option.

“Unfortunately, the special purpose vehicle that was created by the former management of AMCON for the conversion of Arik and Aero to a national carrier had been sold. But we can create another SPV for this,” a senior official of AMCON explained.

However, some others believed that a flag carrier was best for the country and not a national carrier, noting that private investors were critical in the arrangement.

At one point Nigeria had a flourishing national carrier in its history. The now-defunct Nigeria Airways was established in August 1958, after the dissolution of the West African Airways Corporation.

It finally ceased operations in 2003 owing to military incursion, mismanagement, corruption and bad debts and was liquidated in 2004.

In its heydays, Nigeria Airways had over 30 aircraft. Nigeria Airways was later succeeded by Virgin Nigeria, and the ground facilities were taken over by Arik Air.

Despite the obstacles it faced, the legacy of Nigeria Airways stood as a beacon of hope, symbolising the country’s aspirations for a robust and prosperous national carrier.

Despite the cost, one would wonder why a country like Nigeria, with its dwindling resources, needs a national carrier.

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However, there are compelling reasons to consider. First, a national airline catalyses economic growth and development. Its presence can play a crucial role in facilitating trade and business connections, attracting foreign investments, and encouraging the growth of ancillary sectors such as hospitality, transportation, and tourism services.

The existence of a national carrier in any country is often necessitated by the need to reciprocate air traffic in a situation where there are no capable local carriers and the need to represent the country in other countries and create employment opportunities.

Moreover, the establishment of a national carrier allows countries to retain revenue that would otherwise be lost to foreign operations.

Nigeria, for instance, loses about $2.3bn on annual capital flights to foreign airlines, according to Ventures Africa. By owning a national carrier, a significant portion of this revenue that was previously lost would be retained within the country.

Also, a national carrier helps facilitate the repatriation of citizens during crises, ensuring their safe return home. During times of conflict or civil unrest, when commercial flights may be disrupted or unavailable, a national carrier can step in to provide evacuation services and bring citizens back to their home country.

For example, when Nigerian students were trapped in the Russian-Ukraine war and war-torn Sudan, a national carrier could have helped expedite the repatriation process. So, instead of relying solely on the goodwill of private airlines like Air Peace, which may encounter delays and logistical hurdles, a national carrier could have facilitated a more efficient and coordinated rescue operation.

Additionally, a national carrier bestows on the country a sense of national pride. It is a tangible representation of the nation’s accomplishments and its ability to compete in international space.

As Nigeria continues to push for a national carrier, watchers are eagerly anticipating the swift realisation of the dream.

The President of the Association of Foreign Airlines and Representatives in Nigeria, Dr Kingsley Nwokoma, stated that the country needed a flag carrier and not a national carrier.

Nwokoma said the involvement of stakeholders cannot be undermined, insisting that the government did not need to border itself with the financing of the airline.

He said, “No, flag carriers will be appropriate like practised in other climes. AMCON is funding these indebted airlines, pumping more money. AMCON should divest and sell them off.

“This is why a flag carrier like KLM, Lufthansa and British Airways’ burden is not on the government but on investors.

“A flag carrier will carry the name of the country, enjoy preferential treatment and country BASA arrangements. Private investors are critical here.”

Another industry expert, Olumide Ohunayo, said venturing into a national carrier was dependent on the country’s vision for the aviation industry but submitted that it was time to lift the two most indebted airlines from the control of AMCON.

He said, “It depends on what the government feels. If it is happy to have a national carrier now, then we are happy to have more aircraft, but I feel that it is time to take the most indebted airline away from AMCON. Maybe the Ministry of Aviation to take over because they cannot have the desired achievement under the control of AMCON.”

When contacted, another industry expert, Sheri Kyari, stated that for a national carrier to be successful in the country, the government must possess a high level of courage and selflessness from its officials.

He also noted that airline operators must also agree that “they don’t have what it takes to be in the international arena because of limited capital”.

He further said, “For Nigeria to have and run a successful national carrier will require courage and the political will from the government to force it to be; selflessness from government officials, because personal interest has always been an issue in all attempts to start the national carrier.

“For Nigerians to understand and stop continuous ethnic promotion and trying to appropriate the business of aviation to one tribe has and will be counterproductive.”

He further stated, “Nigerians must come together to wrestle with global aviation and have their space without too much politics but straight airline business.

“After all the above, the government can have a framework for the establishment of a national carrier with substantive shareholding by Nigerians. However, for the first ten years, there could be foreign technical partners, especially at the management level.”