Domestic Airlines Incur N32bn Annually On Aviation Fuel

Written by  |  Monday, 16 September 2013 00:00  |  Published in AVIATION TRENDS

 Domestic carriers spend about N32 billion annually on aviation fuel, known as Jet A1, with Arik Air spending about N1.9 billion monthly (N22.8 billion annually) and the rest on scheduled flight spending over N800 million (N9.6 billion annually), which constitute over 30 per cent of each airline’s operational cost, report has shown.For many years airlines have complained about the high cost of aviation fuel in the country when the prices were outrageously high as oil marketers allegedly hoard the product to create artificial scarcity, but recently it has been confirmed that the price of the product per liter does not differ from its price in the international market.Fuel is sold at about N175.00 to N185.00 per litre, which is more than $1.00 but the product is cheaper like in the US and the Middle East countries where oil is produced and refined. So airline operators argue that as the 6th oil-producing country in the world, Nigeria should be selling Jet A1 about N95, which is about $0.60 cents, which is the price it is sold in many oil producing countries.The cost of fuel is a menace to the coffers of the airlines and combined with other charges and cost of aircraft maintenance, some airlines are bereft of operational funds few years after they have started operation.

Ethiopian Airlines Celebrate Huge Profit

Written by  |  Monday, 16 September 2013 00:00  |  Published in AVIATION TRENDS

DDIS ABABA, Ethiopia (AP) - Ethiopian Airlines has made a record profit, the company's chief executive officer said this week Tewolde Gebremariam partly credited the profitability of Ethiopian Airlines to Boeing's problematic 787 planes.He said the company's operating profit between July 2012 and June 2013 is 2.7 billion birr ($143,137,098) from a billion birr ($53,013,740) the previous financial year.Citing unaudited company accounts Tewolde said that the company's net profits also surged during the period to 2.03 billion birr ($107,617,892) from 734 million birr ($39,230,167) of the previous year, a 178 percent increase.Tewolde said the performance is a result of "exceptionally dedicated employees" and the Boeing 787 planes he described as super-efficient. He said the planes helped the company save on fuel costs.
In January, Dreamliner's around the world were grounded because of overheating lithium batteries. Ethiopian Airlines was the first to get the plane back in

Nigeria Immigration Service Redefined Work And Ethics

Written by  |  Friday, 13 September 2013 00:00  |  Published in AVIATION TRENDS

The Comptroller General of Immigration, David Parradang, literally swept into the office of the Nigeria Immigration Service at the Murtala Muhammed International Airport, Lagos accompanied by senior officials. His dark face was darker with rage. He impatiently waited for the welcome speech, which was brief, and without protocol vented his anger. "I am not satisfied with the news I have been getting from the airport here. They say that we beg at this airport. I think we render more honorable service than that. That is why I said let me come and see for myself. And I have people call me when they arrive here to say that arrival hall was chaotic; that it is just like a market; I want to see this for myself, too.

 "The last thing I want to see here is what happens at our private aircraft operations. That is a very important security leg of this country. We want to put our eyes there. We want to know who are coming to the private terminals. Who comes there, who uses the services, what do they come in with? We have to check and make sure that the place is secure. "Not the situation where aircraft will come and you disembark on the aircraft and enter your car on the tarmac without security checks. I want to see for myself what is happening there. I want to go there," he stressed.

Air Fares Dictated By Operational Cost, Says Dana Airline

Written by  |  Friday, 13 September 2013 00:00  |  Published in AVIATION TRENDS

The relative high fares in the domestic air travel in Nigeria has been attributed to high cost of operation of airlines, from the cost of fuel, cost of maintenance to agency charges, including landing and parking fees. Comparatively, the cost of air travel in Nigeria may be one of the highest in the world, as one hour flight, which averages $80 to $100 in other parts of the world, cost as much as $200 (N32, 000) or more in Nigeria. But this high price is dictated by high cost of operation by the domestic carriers.Dana Air marketing manager, Obi Mbanuzo, explained that high fares are a function of cost of operation and such cost is not even wholly within the control of the airlines.

 "A lot of factors are involved. One of them is cost of aviation fuel, which takes about 30 to 40 per cent of the operating cost of any airline. If we have a situation the cost of the operation could be brought down definitely that will impact on the fares airlines are offering to passengers; that will also encourage more people to fly. Apart from that there is this issue of maintenance. Here in Nigeria we do not have maintenance, repair overhaul facility; basically all our major maintenance, especially the heavy checks, are done overseas. The cost of maintenance impacts on the operations and the fares."

High Cost - Airline Wants VAT Removed On Ticket

Written by  |  Thursday, 12 September 2013 00:00  |  Published in AVIATION TRENDS

Dana Air has asked the Federal Government to remove the 5 percent value added tax (VAT) on air tickets so as to reduce the cost of air travel. Dana Air noted that beside aviation fuel (jet A1) which constitutes about 40 percent of operating costs of airlines with huge impact on air ticket cost, VAT also drives the cost higher. Mr. Obi Mbanuzuo, the Head, Commercial, Dana Air made the call in Lagos during the inauguration flight service of Dana Air from Abuja to Uyo and Calabar. He said it is not within the powers of the airlines alone to drive down cost of air ticket; government must also play a role.
"It's not within our power only to drive down cost of air ticket. We are doing the best we can within the airline but at the same time we are trying to lobby government and service organizations within the aviation industry to make sure the costs are affordable. For a country of 150 million people and just about 5 million people are flying, it's really not good enough. If we get about 10 percent (15 million) people flying, it will be better for the industry but the prices would have to come down to achieve this," he said.Commenting on the 30 aircraft window proposed for airlines by the Federal Ministry of Aviation, he said the airlines haven't seen any reasonable commitment to the initiative.

Dana Airline Promise To Upgrade Quality Services

Written by  |  Thursday, 12 September 2013 00:00  |  Published in AVIATION TRENDS

Obialor Mbanuzor is head, commercial, Dana Airlines. During the week, the airline commenced operations to Calabar and Uyo from Abuja. In his interview, he spoke of plans to acquire more aircraft and to add routes on the West Coast to its networks subject to government approval. Excerpts: Route expansion The general plan of Dana Air is to cover as much of the Nigerian market as we can and in our next plan we are looking towards the South East zone, before December we should be either in Enugu or Owerri.

Aircraft acquisition We did say we are adding two aircraft; we currently have five airplanes in the fleet and before December we are set to have 7 aircraft. We are definitely working on that, we are still talking with Boeing. The Boeing team was here recently and I believe they are coming back this month. So discussions are still ongoing because we want to get the right airplanes for the right market at the right price. It is not good enough to just say let’s get Boeing.

Cost of ticket fare The fares are also a function of the cost of operation, so apart from trying our best to do promos; we also have to lobby government and services organizations who are also part of the providers of air services.

FAAN Installs Scanning Machines At Nigerian Airports

Written by  |  Wednesday, 11 September 2013 00:00  |  Published in AVIATION TRENDS

The Federal Airports Authority of Nigeria (FAAN) said it has taken further steps to improve safety and security at the airports by installing additional modern security equipment, in line with the on-going transformation in the aviation sector.According to Yakubu Dati, FAAN's spokesman, the Authority has installed seven brand new X-ray scanning machines at the Murtala Muhammed Airport, Lagos, five at the cargo basement of the international terminal, one at the Hajj and Cargo terminal and another at the airport's domestic terminal 1. This is in addition to existing security equipment at the airport.

The Implementation Of N2trn Annual Capital Flight To Foreign Ships

Written by  |  Wednesday, 11 September 2013 00:00  |  Published in AVIATION TRENDS

Since the liquidation of Nigerian National Shipping Line (NNSL) in September 1995, the Nigerian economy has continued to witness an estimated annual capital flight of N2trillion to foreign-owned vessels that dominate the nation’s shipping business.This annual capital flight, analysts say, results from foreign domination of the national and international shipping of Nigeria’s seaborne trade. To salvage the situation, the Federal Government in 2003 took a bold step to change the face of Nigerian shipping business within its coasts by enacting the Coastal and Inland Shipping (Cabotage) Act. Cabotage Act reserves the commercial transportation of goods and services within Nigerian coastal and inland waters to vessels flying Nigerian flag and owned and crewed by Nigerians. The Act was aimed at restricting foreign participation in Nigeria’s domestic coastal trade towards encouraging full indigenous involvement in the nation’s shipping business.
The Act also made provision for Cabotage Vessel Financing Fund (CVFF), which is expected to promote the development of indigenous ship acquisition capacity by providing financial assistance to Nigerian ship owners involved in domestic coastal shipping.CVFF results from 2 percent surcharge of the contract sum performed by Nigerian vessels including monies generated from tariff, fees for licenses and waivers under the coastal trade. According to the guiding principles, CVFF is meant to benefit Nigerian ship owners and shipping companies that are wholly owned by Nigerians.

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