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Six Nigerian airlines form historic alliance

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Six Nigeria airlines including Air Peace, Azman Air, United Nigeria Airline, Arik Air, Aero Contractors and Max Air have signed a pact tagged the ‘Spring Alliance’, to mutually support one another’s operations and improve service delivery for their clients.

The carriers signed the alliance on Tuesday, March 8, 2022, in Lagos.

Speaking, the Chairman of Air Peace and Vice-president of the Airline Operators of Nigeria (AON), Allen Onyema, stated that the Alliance would benefit passengers who fly with the six airlines.

The alliance is structured after the popular global airline alliances.

Onyema explained that with the alliance, passengers of any of the airlines would be protected if one of the airlines had an issue.

“It is our response to the complaints of the flying public, so this alliance will enable us to satisfy them,” he said.

Onyema stressed that the initiative to form the alliance was a revolution in Nigeria’s aviation sector, while urging other airlines to tap into the benefits offered by the alliance by joining.

He said that the Spring Alliance was not limited to Nigerian airlines alone, as other African airlines could join, adding that the alliance originated from Nigeria, but open to the world.

He said: “In the Aviation world, we have so many alliances airlines. We have the Star Alliance; there is One World and several others. Airlines decide to key into those alliances for the benefit of both the passengers and the airlines themselves.

“So, today, the 8th day of March 2022, some airlines in Nigeria notably, Air Peace, Azman Air, Arik Air, Aero Contractors, Max Air & United Nigeria have decided to come together to form what we call the Spring Alliance.

“We decided to come together to do this for the benefit of the flying public that use the opportunities provided by these airlines to fly.

“By this alliance, our passengers are protected whenever there is a problem with one airline. It is our response to the complaints of the flying public, so this alliance will enable us to satisfy them.

“But with this alliance and what we are going to be doing henceforth, the flying public will reap the benefit. For example, if Air Peace has a tech issue on any of its aircraft, the passengers of Air Peace need not be delayed. If any member of this alliance is going to the same destination, all we need to do is move the passengers over to that other airline, a member of the alliance, at no further cost to the passenger”.

“This will help aviation, it will help the sustainability of our operations, it will help the cause of the flying public to experience seamless commuting whenever they choose to.

“This is where we are today, so we are hereby putting our signatories to these papers today, launching this idea that will revolutionise Nigeria’s scheduled flight operations for the better.”

The Managing Director, Aero Contractors, Capt. Abdullahi Mahmood, noted that the formation of the Spring Alliance was a historic move, which prioritises the satisfaction of the passenger.

“History has been made here today in Nigeria, and this is the first time something like this is happening in Nigeria’s aviation industry. You can see that the airline operators are fully committed to making sure that our passengers are satisfied. Like we say, for every challenge, you see an opportunity and probably this is the time that we have seen an opportunity whereby the airlines can come together, work together and have a healthy competition whereby at the end of the day, we make our passengers happy and safe.

“Safety is the number one priority and this is what we stand for and coming together, like my colleagues rightly said, you find out that all these delays are caused by problems that passengers do not know and we just carry them from one point to another on time and make sure that everything goes smoothly. We are asking passengers to give their utmost cooperation, we are doing our best, it is a challenging situation we find ourselves but yes, we are all in this together and we are hopefully coming out together,” Mahmood said.

He also thanked all the relevant aviation stakeholders, adding that “this is just the beginning. Like my colleague rightly said, this alliance is not only for Nigerian airlines; we are looking at other airlines around the world keying into the Spring Alliance”.

The CEO of United Nigeria Airline, Obiora Okonkwo, said the alliance would revolutionise flight services for the Nigerian flying public, noting that passenger satisfaction was the major objective behind its formation.

Accordording to Okonkwo, “Today, history has been made at this landmark event. The Nigerian scheduled operators coming together to sign this all-important document. This, no doubt, will revolutionise
the service and provision for the typical traveller in Nigeria. It is all about the passenger.

“There’s no doubt that Nigerian airlines are going through some situations and part of the ways to react to this is to have the passengers in mind. It is simply thinking out-of-the-box. We are not reinventing the wheel, we are just adopting what we have seen that has worked in other places, and it will surely work in Nigeria so that the passengers going to the airport are more guaranteed that they will fly.

“On this note, we are thanking the passengers and we continue to appeal to them to show some understanding and to continue to show us love, knowing that we are in this together, that the airlines will continue to do anything possible within their strength to ensure efficiency of our services and then thanking the government that has been showing some understanding.

“In the coming days, there will be talks and discussions as airline operators will be engaging stakeholders in the industry, all for the best of our services and efficiency”.

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BUSINESS

US stocks suffer biggest daily drop in almost two years

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US stocks posted the biggest daily drop in almost two years as investors assess the impact of higher prices on earnings and prospects for monetary policy tightening on economic growth. The dollar and Treasuries gained amid a pickup in haven bids.

The selloff sent the S&P 500 down 4%, with the plunge in consumer shares surpassing 6%. Target Corp. tumbled more than 20% in its worst rout since 1987, after trimming its profit forecast due to a surge in costs. Shares of retailers from Walmart Inc. to Macy’s Inc. were caught in the downdraft. The Nasdaq 100 fell the most among major benchmarks, dropping more than 5% as growth-related tech stocks sank. Megacaps Apple Inc. and Amazon.com Inc. slid at least 5%.

Treasuries rose across the board, sending the 10- and 30-year Treasury yields down as much as 11 basis points. The dollar rose against all of its Group-of-10 counterparts, except the yen and Swiss franc. Gold caught bids in the move into havens.

The benchmark S&P 500 is emerging from the longest weekly slump since 2011, but any rebounds in risk sentiment are proving fragile amid tightening monetary settings, Russia’s war in Ukraine and China’s Covid lockdowns.

In some of his most hawkish remarks to date, Federal Reserve Chair Jerome Powell said Tuesday that the US central bank will raise interest rates until there is “clear and convincing” evidence that inflation is in retreat. Chicago Fed President Charles Evans said Wednesday he sees a half-point rate increase at next month’s meeting and “probably thereafter.”

In Europe, new-vehicle sales shrank for a 10th month in a row as the industry remains mired in supply-chain crises, while euro-area inflation plateaued at a record high. Meanwhile, UK inflation rose to its highest level since Margaret Thatcher was prime minister 40 years ago, adding to pressure for action from the government and central bank.

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Netflix lays off 150 employees due to slow revenue growth and business needs

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Netflix is reportedly laying off nearly 150 employees in the coming days due to disappointing earnings and slow revenue growth.

According to a Variety report, the Amazon Prime Video rival might also terminate its contract with contractual contributors.

The layoffs are about 2 per cent of Netflix’s US workforce. “As we explained [in reporting Q1] earnings, our slowing revenue growth means we are also having to slow our cost growth as a company. So sadly, we are letting around 150 employees go today, mostly U.S.-based,” a Netflix spokesperson said.

The statement further revealed that the decision was primarily driven by business needs rather than individual performance. Netflix reported $7.87 billion in Q1, which was short of Wall Street’s estimates of $7.93 billion.

The report further reveals that nearly 70 part-time employees in Netflix’s animation studio will have to pack up and leave. A report by The Verge stated that about 26 contractors working on Netflix’s fan-focused Tudum website might see a termination.

“A number of agency contractors have also been impacted by the news announced this morning. We are grateful for their contributions to Netflix,” the company said.

Netflix, in its recent earnings call, revealed that it lost thousands of subscribers, which is a first for the company in over a decade.

The company expects to lose an additional 2 million in the next quarter due to the ongoing war between Russia and Ukraine. Netflix has shut shop in Russia following the country’s invasion of Ukraine.

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Dollar breaks N600/$ ceiling ahead of party’s presidential primaries

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Less than two weeks to the presidential primaries of the political parties ahead of the 2023 elections, the US dollar has broken the N600/$ mark at the parallel market and set the tone for a possible uptick in the coming days.

The black market rate had traded between N570/$ and N590/$ since the beginning of the year while the Central bank of Nigeria (CBN)’s intervention at the Nigerian Autonomous Foreign Exchange (NAFEX) has kept its rate under N420/$.

With the latest slump of the naira, the arbitrage between the parallel and NAFEX, which is regarded as the official window, is now inching close to N200/$. The spread measures the deviation of the controlled official rate from the real rate of exchange, with experts calling for liberalisation of the market to enable naira to find its true value.

The World Bank and the International Monetary Fund (IMF) have also warned of the repercussions of sustaining an artificially high naira while calling on the CBN to embark on market reform.

But the CBN has maintained that Nigeria, with the current high level of importation and underperformance of the industrial sector, cannot afford to float the naira completely as the exchange rate could spill out of control.

At the Lagos street market, yesterday, naira traded between N595/$ and N600/$ band. With the presidential primaries of the two leading political parties scheduled for Abuja next weekend, there is an expectation the demand pressure has not peaked, suggesting that naira is in for a protracted pressure.

At peer-to-peer (P2P) trading platforms, the dollar has been trading above N600 in the past three weeks, which had signaled that the black market rate could break through the psychological ceiling.

With that eventually happening, naira could be on a renewed free fall.

But there is also hope that it is a season to offload warehoused hard currencies for political campaigns to possibly shore up supply.

Experts are not sure where rising demand and supply of foreign exchange would lead the naira to, but the interplay between the movements of the two variables is a key factor in predicting the value of the naira in the tense political season. Godwin Owoh, a professor of applied economics, advised Nigerians to prepare for a steeper fall of the local currency, saying partisan politics and intra-party meetings, which are highly dollarised would bring much pressure to bear.

The CBN has promised to continue to protect the naira but its ability could be constrained by the equally falling reserve. For the first time in eight months, the gross reserves dropped below N39 billion on Monday, when CBN data put the figures at N38.92 billion. Effectively, the country’s reserves have depleted by $160 billion year-to-date.

Bismarck Rewane, an economist, had projected the reserve to collapse to $32 billion in the year as he expected the CBN to spend $8 to $10 billion defending the naira, which is taking much pressure from excessive importation.

The value of Nigeria’s imports increased by 64 per cent last year to N20.84 trillion. Sadly, the value of exports increased at a slower rate – 51 per cent – to N18. 91 trillion in the same period. The falling reserves and rising imports have put the apex bank in dire straits in its efforts to continue to defend the naira.

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