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How Nigeria Loses N30bn Monthly due to Ban on International Flights

*Loses out on $311m African airline bailout fund

-By Adeniyi Onifade

Although the federal government announced the resumption of international flights by August 29, the Nigerian aviation industry has on a monthly basis lost about N30 billion in the last five months due to the continued ban on international flights due to the coronavirus pandemic.

Recall that Minister of Aviation, Hadi Sirika announced that the Abuja and Lagos airports will be the pioneer airports to resume international flights on August 29th, while other airports will follow suit.
However, statistics has shown that in the last five months, Nigerian aviation sector has been experiencing revenue drought as the international airspace remained closed.
The losses were said to be majorly borne by operating local and international carriers, and sundry service providers, were derived from the $1 billion or N360 billion yearly average earning and about five million passengers that travel through Nigeria.
Data released by the International Air Transport Association (IATA), showed that the sector could lose as much as $990 million to $1.1 billion had the closure stayed longer.

Already Passenger traffic losses were put at between 4.7 million and 5.32 million. Job losses for the sector were also put at 125,400 and 139,500.

The data showed that Nigeria is the second worst-hit by the restriction in commercial flight, after South Africa.

South Africa was estimated to lose $3.02 billion. This was due to passenger traffic of between 14.5 million and 15.61 million passengers that were not carried. Job losses were between 251,100 and 269,900.

In another development Airlines on the African continent have garnered a total of $311 million bailout funds from governments’ bailout funds, but conspicuously missing among the “aviation-friendly nations” is Nigeria.

Although the Federal Government has since pledged to support the local sector with at least N27 billion in loans and grants, the sector is yet to receive the pledge despite the resumption of flight operations.

The International Air Transport Association (IATA), had urged the federal government, to free bottlenecks so that urgently needed financial relief pledged for air transport and tourism reaches the distressed businesses it is meant to help, and implement safe restart to aviation.

IATA, in an update on bailout progress on the African continent, noted that Rwanda, Senegal, Côte D’Ivoire, and Burkina Faso accounted for a total of $311 million in direct financial support to air transport.

Subsequently, a further $30 billion has been promised by some governments, international finance bodies and other institutions including the African Development Bank, African Export-Import Bank, African Union, and the International Monetary Fund (IMF) for air transport and tourism.

However, much of the relief is yet to reach those in need due to institutional bureaucracy, complex application and creditworthiness processes, as well as cumbersome conditions to secure finance.

Way Forward
To halt the huge loses by the aviation sector, IATA has urged the Nigerian government and others in Africa to implement alternatives to quarantine on arrival that would allow economies to re-start while avoiding the importation of COVID-19 cases.

As at last week, some airlines have expressed readiness to fly the Nigerian routes again, though subject to the governments reopening of the international airports and removal of the 14-day quarantine order.

Virgin Atlantic announced plans to restart passenger flying to 17 additional destinations from August 2020. Flights from Lagos to London Heathrow started on the 29th August 2020 and will provide connections to a range of U.S. destinations.
The Chief Commercial Officer, Virgin Atlantic, Juha Jarvinen, has stated earlier that they were monitoring external conditions closely, in particular the travel restrictions many countries have in place including the 14 day quarantine policy for travellers entering the UK.

Delta Air also disclosed plans to add almost 1,000 flights system-wide in July, boosting service and nonstop connectivity to popular summer destinations and major business markets.

However, government-imposed quarantine measures in 36 countries across Africa and the Middle East (AME) account for 40 per cent of all quarantine measures globally.
With over 80 per cent of travellers unwilling to travel when quarantine is required, “the impact of these measures is that countries remain in lockdown even if their borders are open.”

IATA’s Regional Vice President for Africa and the Middle East, Muhammad Albakri, said it was critical that AME governments implement alternatives to quarantine measures.

“AME has the highest number of countries in the world with government-imposed quarantine measures on arriving passengers. The region is effectively in complete lockdown with the travel and tourism sector shuttered. This is detrimental in a region where 8.6 million people depend on aviation for their livelihoods,” Albakri said.

IATA proposes a layering of measures to protect public health while re-starting aviation. They are reducing the risk of imported cases via travellers, and discouraging symptomatic passengers from travelling with airlines offering flexibility to passengers, who need to adjust their schedule.

Also, public health risk mitigation measures such as health screening by governments in the form of health declarations, and COVID-19 testing for travelers from countries perceived to be “higher-risk” when accurate and fast testing is available at scale.

Economies across the AME have been devastated by COVID-19, and the aviation industry has been especially hard-hit. Across the region, more than 8.6 million jobs in the airline industry and those businesses supported by aviation are at risk. Thousands of jobs have already been lost due to the shutdown of air traffic.

Also, with the gradual opening of international air flights around the globe, experts fear that there will be low passenger inflow since the battle against covid-19 is not yet over and many countries are still experiencing fresh wave of infections.