The International Air Transport Association (IATA) has continued to advice governments on empowering aviation to deliver more value, noting that growing demand for aviation connectivity is at risk.
IATA urged governments to re-commit themselves to the ideals of airline deregulation and the free market, so as to permit aviation to continue to deliver the benefits of global connectivity that make possible $2.2 trillion worth of economic activity.
Tony Tyler, IATA DG and CEO said that “Airlines are the transit system for the global economy; and they have transformed commerce every bit as thoroughly as the automobile transformed America. But our ability to meet the growing demand for connectivity is at risk”.
Addressing the Wings Club in New York, during the week, Tyler said the threat does not come from market forces. “Our biggest challenge comes from governments that are engaging in what I would broadly describe as regulatory backtracking.”
“This is a global issue, but it is particularly distressing to find that the United States, where this industry was born and which led the world in liberalizing domestic and international air transport, seems to be moving forward into the past. Apparently policy makers in Washington no longer trust the invisible hand of the marketplace to maintain a vibrant, competitive industry—despite overwhelming evidence that the market is working. The net result is not just bad for airlines, but for air travelers and the economy.”
Tyler cited regulation, distribution, consolidation and taxation as four areas where the market is not being permitted to operate efficiently.
He said: “The airline industry may be deregulated to the extent that carriers are permitted to set their fares according to demand. But regulators aim to design the details of competition in a manner that is wholly at odds with how other industries are treated and with the workings of the free market. In particular, they appear determined to hold commercial aviation to a different business standard than they impose on any other form of transportation—or consumer facing activities.
“It is totally appropriate to set simple minimum customer service standards. But that’s not what’s happening. Regulators are micro-managing our businesses, telling us how we may advertise our services, how long we must hold a reservation that has not been paid for and how we are to manage operational disruptions regardless of the cause. These regulations impose a huge penalty on the economy and ultimately raise the cost of air travel for all consumers.”
Airlines are committed to ensuring the safety and comfort of passengers and recognize the need for passengers to have access to basic protections during their journey.
To that end, IATA members recently affirmed a set of core principles on consumer protection that aim to strike a balance between protecting passengers while maintaining industry competitiveness and recognizing the power of the marketplace.
“Standards enable innovation and efficiency and make it possible for incumbents and new entrants to work from the same blueprint. We believe an NDC standard will enhance the air travel shopping experience for passengers. But, let me assure you of a few things. NDC will operate within the same privacy laws that govern every other business. That is no change from today. But, by giving travel agents more information, there will be greater transparency. The NDC standard will enable much richer comparison shopping for travel products, not just the base fare, but the entire spectrum of offerings.”
Tyler argued that aviation needs to be treated like other industries when it comes to consolidation. “It is a fact that consolidation has resulted in a healthier, more profitable industry and that is good news for travelers as well, because it means airlines have the financial wherewithal to invest in their products and services. And US government data show that service is improving on the things that matter most to customers such as punctuality and baggage delivery. Yet airlines face higher hurdles than other businesses when it comes to mergers and acquisition.”
“We recently were reminded of this when the Department of Justice (DOJ) announced it would sue to prevent the merger of American Airlines and US Airways. I am not an expert on US antitrust policy, but I do know something about the airline industry and I have to agree with those in the investment community and elsewhere who have found DOJ’s arguments to be faulty and unpersuasive.”
Aviation is taxed at levels far exceeding those of most other activities, but too little of that money finds its way into infrastructure investment. “Fees and taxes represent around 20% of the average US domestic ticket and totaled $18.9 billion last year, according to data from Airlines for America. And Administration proposals for the 2014 fiscal year include a slew of tax increases and new fees adding further billions to the cost of air travel,” said Tyler.
“In a little less than 100 years, commercial aviation has transformed the world. This year, we expect airlines to carry more than 3 billion passengers—equivalent to around 44% of the Earth’s population and we make possible $2.2 trillion worth of economic activity. By value, over 35% of the goods traded internationally are transported by air. Within the United States, aviation contributes some $669.5 billion of gross value added (GVA) annually, equivalent to 4.9% of GDP, and supports 9.3 million jobs. Our message is ‘Let us make the second century of air transport even more remarkable than the first”.
CBN Pulls Rate Cut Trigger, King Dollar Returns
By Lukman Otunuga, Senior Research Analyst at FXTM,
In a move that caught investors off-guard this week, the Central Bank of Nigeria (CBN) slashed interest rates by 100 basis points bringing the MPR to 11.5%. Given how inflation has been above target since 2015, rates were expected to remain unchanged for the rest of 2020 and possibly early 2021.
The question on the mind of many is whether the rate cut will achieve the desired effect by stimulating consumption and economic growth? Ongoing border closures and disruptions created by COVID-19 have pushed inflation to levels not seen since March 2018 above 13.20% while a drop in the production and price of Oil continues to rub salt into the wound. While looser monetary policy could support growth, it may come at the cost of rising inflation and weaker Naira.
Over the past few months, central banks across the globe have deployed unprecedented measures to defend their respective economies against the coronavirus menace. However, fiscal policy has been identified as the sharper tool with governments across the world providing a critical lifeline to keep the wheels of their respective economies rolling.
Outside of Nigeria, King Dollar made a return by appreciating against every single G10 currency. In times of uncertainty, everyone wants a juicy piece of the world’s most liquid currency. As coronavirus cases rise in Europe and other parts of the world, the flight to safety is likely to boost appetite for the Dollar. This is bad news for many emerging markets currencies, especially those with high Dollar-denominated debt.
On the commodity side, Oil prices remain heavily influenced by demand-side factors and the state of the global economy. Prices are likely to remain stuck around the $40 regions in the near term, especially If another round of possible lockdowns hit Oil demand. Looking at the technicals, WTI Crude is under pressure on the daily charts. If prices are unable to break away from the sticky $40 regions, the next key point of interest remains around $38. A weekly close above $41.50 could pave a path towards $43.
NCC Arrests Man for Hacking into DSTV System
Nigeria Copyright Commission (NCC), has arrested one Mr Aliu Olalekan, for allegedly hacking into DSTV system and watching the channels free without subscription.
Mr Matthew Ojo, NCC Director in the Lagos Directorate Office said this while speaking with newsmen in Lagos, on Tuesday.
He said that the suspect used to watch DSTV channels free without subscription on his Android phone via an app which he downloaded on google play store.
“This suspect distributed the know-how to his telegram followers and on his blog with the aim of gaining more followers and viewership on his blog and makes more money through google ad-sense.
“The operation was based on surveillance which had earlier been carried out by the Multi-choice team and verified by a copyright inspector, ” he said.
He added that the arrest was made in collaboration with a team of copyright inspectors led by the Head of Enforcement Department, Mr Charles Amudipe.
Others included; a team from Multichoice Nigeria led by Mr Umar Ibrahim and policemen from Lagos Command Headquarters, Ikeja.
Ojo said that the joint team conducted an anti-piracy operation at the premises of the culprit in Amukoko, Lagos.
According to him, the suspect was contacted on phone by a member of the operation team on the disguise of patronising him. “The suspect came out to meet the caller and in the process of discussion, he was apprehended.
“The suspect took the team to his resident. The squad paraded his one-room apartment and recovered his laptop and phones used in perpetrating the ungodly act. “He was arrested and brought to the copyright commission office for further investigation, ” he said.
Ojo said that, on getting to the commission’s office, the statement of the suspect was taken and the inventory of items seized from him taken. He said that investigation on the matter was still ongoing and if found guilty the suspect will be charged to court.
NCC, Digital Encode Support NITRA Innovative Tech Forum On Post-COVID-19 Strategies
The Nigerian Communications Commission (NCC), Nigeria’s telecommunications regulator and Digital Encode, Cybersecurity and Compliance advisory company, have indicated interest to partner with the Nigeria Information Technology Reporters Association (NITRA), the national umbrella body of ICT reporters, as it organizes a forum that will x-ray the industry’s future plans for ICT growth post pandemic era.
The event, slated to hold on October 15, 2020, will seek to discuss the needs for a fortified ICT sector after the COVID-19 era, and the level of preparedness of ICT stakeholders to embrace the challenge of being pivotal to the stability and growth of all other sectors.
A statement from NITRA National Secretariat in Lagos indicates that due to the pandemic and need to observe the COVID-19 protocol on social distancing, the event will be held via a Webinar.
This year’s theme, “Multi-stakeholder Approach To National Recovery Post-Pandemic”, is in line with the annual event’s generic theme, ‘NITRA Innovative Tech Forum’, a contribution by NITRA to the development of Information and Communication Technologies (ICTs) innovations and policies in Nigeria.
Prof. Umar Danbatta, executive vice chairman, NCC is expected to deliver the keynote speech at the event and will throw more light on Federal Government’s plans, programmes and policies on post-pandemic strategies using ICT.
Dr. Adewale Obadare and Dr. Seyi Akindeinde, founders of Digital Encode, while accepting to support the event expressed their readiness to offer their expertise in Cybersecurity for organisations to prepare against cyber- attacks with the new normal.
They will also highlight areas that are high risks that need fortification in terms of cybersecurity.
Speaking on the event, Mr. Chike Onwuegbuchi, national chairman, NITRA, noted that as the COVID-19 pandemic continues to leave its negative trails across the globe, economic reboot for countries will not only depend on how well they readapt to the new normal, but also more on their recovery plans.
According to him: “While the federal government has consistently expressed its willingness to set all policies in place to engender growth, and accelerated implementation of these policies, private sector firms have also shown great hunger for the task ahead in post-COVID-19 era.
However, the question that needs to be answered is whether all stakeholders are ready for the required task ahead.”
The event will also offer participating companies opportunities to publicize some of their individual efforts at contributing to reacting a soft landing or lifeline for SMEs and other ancillary companies as the pandemic threatens their survival.
Digital Encode is a multi-award winning and leading consulting and integration firm that specializes in the design, management, and security of business-critical networks, telecommunications environments and other Information Technology (IT) infrastructures.
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