The aviation industry and travel agencies have resigned to a long downtime, fueling concerns about looming increase in airfare, low patronage of airlines as Nigeria gradually reopens.
Speaking with SaharaReporters, the President of the National Association of Nigerian Travel Agencies, Susan Akporiaye, says Nigerians will rather hold meetings via Zoom than fly aeroplanes to catch up with appointments.
Akporiaye says added to the drag in business for the travel sector is an anticipated increase in airfares and road trips following the opening of airports and the lifting of inter-state travel bans.
Airline operators across the globe have been laying-off staff, taking on government bailout and restructuring their finances to stay alive till a vaccine or cure is approved by the WHO and its funders for the treatment of COVID-19.
Those in Nigeria had been left to find ways of staying afloat until the Economic Stability Plan Committee headed by the Vice President, Yemi Osinbajo, recommended a N27bn bailout on June 17.
Akporiaye does not expect Nigerians to start queuing at the departure lounge of airports now they are reopened for domestic flights.
“The Zoom interface of doing meetings has been widely embraced. That will continue for a while. With an increment from the airlines, people will tell themselves, ‘I don’t need to travel,’ I can have my meetings via zoom,” she said.
The aviation industry has been bleeding cash since they were locked up in March. Yet, they have been forced to make certain health and safety investments in preparation for when the Nigerian Civil aviation Authority (NCAA) decides to lift the ban on flights.
The NANTA president predicts that these airlines will not be recouping these investments anytime soon, as they will have to start with a low percentage of actual customers.
“The travels we will be experiencing are travels for family functions and the percentage is very low.” The Airline Operators of Nigeria (AON) said in April that its members had grounded 120 aeroplanes and lost N380bn.
The International Airline Transport Agency (IATA), put the revenue losses in the country at $434m or N156.24bn – based on N360 to a greenback.
The association also said 124,000 of the 241,000 jobs supported by the industry are at risk. In a May 7 article, it asked the federal government to prepare a relief package targeted specifically at the industry:
“Nigeria has announced general relief measures for sectors affected by COVID-19, but not specifically for aviation. Given the importance of air transport for Nigeria’s economy and connectivity, the government must not let aviation fail.
“The industry faces a liquidity crisis. Without a viable aviation sector, Nigeria’s eventual recovery from COVID-19 will be longer and even more painful. Aviation-specific financial relief measures are urgently needed as a matter of survival,” IATA’s Regional Vice President for Africa and the Middle East, Muhammad Albakri, said.
IATA said Nigeria should implement some or all of these reliefs:
“Direct financial support to passenger and cargo carriers; loans, loan guarantees and support for the corporate bond market by the government or Central Bank; tax relief - rebates on payroll taxes paid to date in 2020 and/or an extension of payment terms for the rest of 2020; financial relief on the airport and air traffic control (ATC) charges and taxes; and reduction, waiver or deferral of government-imposed taxes and fees.”
Although IATA did not suggest any size of what the loan should be, experts say the N27bn announced is too paltry. The package consists of payroll grant support to airlines, handlers, caterers and related services; provision of single-digit soft loans with long term repayment plan; and deferred payment of taxes and filing dates.
The federal government also intends to create a private sector-driven national carrier from the same fund, a move airline operators are not pleased with.
Several airlines in more healthy economies have filed for bankruptcy or sacked staff. The most recent of them is Qantas.
In Australia, where the government rolled out a job keeper scheme, its flag carrier said it does not expect international flights to resume until July 2021. Acting on that expectation, Qantas laid-off 6,000 staff and placed half of the remaining 30,000 employees on standby.
Akporiaye said without adequate support, airlines and travel agencies in Nigeria, some of which already had financial troubles before the pandemic, could go under like British airline Thomas Cook.
“Without an adequate bailout, a lot of airlines are going to go down, so also a lot of travel agencies, they won’t survive it,” she said.
Nigeria’s airports were to come alive on June 21 but the federal government has now decided that domestic flights should resume on June 30, with the Nigeria Civil aviation authority (NCAA), saying earlier that not every player in the value chain had matched the guidelines for resumption.