QUARTERLY · No 2 · AUGUST 2012 0 | P a g e Financial Derivatives Company Limited. Tel: 01-7739889 . Website: www.fdcng.com Copyright © 2012 by Financial Derivatives Company Ltd Publisher Financial Derivatives Company Limited Production Coordinator Areade Dare Editors Kathryn Stoneman Thessa Brongers-Bagu Cossana Preston Editorial Committee Mrs. Adefunke Adeyemi Capt. Adedapo Olumide Ms. Lola Adefope Mr. Dennis Eboremie Acknowledgments Damilola Akinbami Ayo Adesina 1 | P a g e Financial Derivatives Company Limited. Tel: 01-7739889 . Website: www.fdcng.com iPhone Wallpapers Front Cover images – Shutterstock, VectorsGraphic Dear Readers, Hello and welcome to the 2nd quarterly edition of Travelnomiks, the magazine for tourists, business travelers and aviation industry professionals. August has been a busy and exciting month worldwide, with the London Olympics dominating headlines. However, as the Olympics have now officially concluded and with Nigerian athletes returning home it is possible that we may now begin to wonder what the point of it all was; and, perhaps why we have all spent so many hours glued to our televisions! However, it is more important to recognize the overall message of the Olympics than to analyze Nigeria’s performance. As, the games are not just a celebration of sporting prowess, they are also an opportunity for the world to come together and to interact. They may also be the greatest visual manifestation of globalization. This visual manifestation is most poignantly expressed in the opening and closing ceremonies when the athletes assemble with their respective flags. During these events the athletes come together to celebrate both their triumphs and losses, and they are bound together through their participation. However, this feeling is not one that is exclusive to the athletes. Across Britain, and around the world, the Olympics have heralded a sense of unity; as all of us, not just the athletes, have been bound together through our participation in these games; the result of both our national and global citizenship. It is this bond that elicits an unintentional but foreseeable effect of the Olympic Games, the will or need to travel. Not only did spectators and athletes from around the world converge on London over the past two weeks but, the lasting effect of the games is expected to be an influx of tourism to the city. The Olympics therefore also represent a reason or purpose for travel. It is an example of what can motivate someone to board a plane, and in the first half of this edition we will examine a variety of other such reasons, a discussion replete with our usual helpful tips and suggestions (from how to select your air fare to understanding luggage fees). In the second half of this publication we will offer an industry update, examining key developments in Nigeria’s aviation sector. We at Financial Derivatives Company (FDC) are all exceedingly proud of the success of the first edition and we hope that this second edition will build on that success. However, while appreciating the success of the first edition, we have never been a company to rest on our laurels; therefore within this edition we have sought to improve the publication, whilst responding to your comments and suggestions. You may have already noticed that the cover has been changed, one of several improvements to the publication. We have also upgraded our graphics, with the inclusion of original photography; and, we have increased the scope of information, while actually condensing the breadth of the publication. You will now find a broader range of travel-related information within these pages as we explore topics ranging from wedding destinations to the consolidation of the Nigerian aviation sector. We hope that you will view this edition as a welcome improvement on its predecessor; and, as always, we look forward to your feedback so we can continue bringing the best of travel to Nigeria. Please enjoy this 2nd edition of Travelnomiks and thank you for taking the time to read it. Sincerely, Bismarck Rewane 2 | P a g e Financial Derivatives Company Limited. Tel: 01-7739889 . Website: www.fdcng.com Table of Contents What’s New Deals and Steals – Naira Stretcher 4 Industry Shakeout The situation at Air Nigeria continues to worsen Are You Being Ripped Off? 7 as the domestic carrier recently got suspended from the IATA clearing house. The Dana Air The Cloud 9 Hotel 8 crash has reignited concerns about the level of safety in the Nigerian Aviation sector. In addition the Airline Operators of Nigeria (AON) A Night At Nigeria House 11 have called for the federal government to lessen the importation costs on aircraft spare parts An Exotic Wedding Destination 13 imported into the country. Why One-Way Fares Are Expensive 17 Shifting Competitive Space Gulf carriers including Emirates, Etihad, Turkish Ecuadorian Experience 18 Airlines and Qatar Airways continue to expand their route networks in Sub-Saharan Africa Aviation Sector Update 21 (SSA). As a result, European carriers are making adjustments to their SSA networks. In addition, security concerns stemming from the activities Nigeria: Safety In the Skies 24 of terrorist sect “Boko Haram” has caused international carriers KLM and Delta Airlines to Time to Consolidate 25 suspend service to the Nnamdi Azikwe Airport in Abuja. In the West African region EasyJet Aircraft Financing: The Rise of Leasing 26 founder, Sir Stelios Haji-Ioannou has teamed up with conglomerate Lorno to introduce the low Baggage Fees 27 cost carrier “FastJet” in late Q3 2012. Image courtesy of Airbus 3 | P a g e Financial Derivatives Company Limited Deals and Steals – Naira Stretcher Summer is traditionally known as a period for number of stopovers. You can be sure to find a exorbitant airfares, as discount airline tickets are great deal on airfares this summer. With the usually hard to come by; much to the disdain of entrance of international carriers into the Nigerian vacationers and budget travelers. Nonetheless market like Etihad Airlines, the quantity of flight there are good deals out there. If travelers look deals for budget travelers continues to increase. hard enough they can get a steal on those summer One destination that continues to grow in airfares. For instance, you can fly to Beijing (China) popularity is Dubai. A Economy class fare to Dubai from Lagos for N182,502 at a distance over costs N238,787. However, a passenger can save 11,753km; which is more than twice the flight 46% on their ticket costs by flying Ethiopian distance between Lagos-London. This is just one Airlines; 38% with Qatar Airways and 31% with example of the many deals to be had this summer. new entrant Etihad Airlines. Although Etihad flies to Abu Dhabi, it’s a thirty minute bus ride to Dubai. The trick is to be willing to plan ahead and be flexible on travels dates, flight duration as well as Other deals can be seen below. LAGOS TO DUBAI (ROUND TRIP) Standard Fare ~ N238,787 Aug 19 – 31 Addis Ababa (< 2hrs) No Transit Visa Required 1 stopover N128,643 Doha (< 3hrs) No Transit Visa Required 1 stopover N148,000 30 min bus ride from Abu Dhabi to No Transit Visa Required Dubai Airport N163,710 LAGOS TO LONDON (ROUND TRIP) Standard Fare ~N175,840 Oct 19 – 31 Amsterdam (< 3hrs) 1 stopover Transit Visa Required N140,802 Direct flight No Transit Visa Required N175,480 Direct flight No Transit Visa Required N160,688 Source: FDC Research All standard fares are direct flights 4 | P a g e Financial Derivatives Company Limited LAGOS TO NEW YORK (ROUND TRIP) Standard Fare ~ N526,653 Aug 19 – 31 Doha (< 8hrs) No Transit Visa Required 1 stopover N220,600 Istanbul (< 12hrs) No Transit Visa Required 1 stopover N385,518 ,688 Amsterdam (< 7hrs) Transit Visa Required 1 stopover N475,453 LAGOS TO ATLANTA (ROUND TRIP) Standard Fare ~N325,910 Sept 19 – 30 Frankfurt (< 6hrs) 1 stopover Transit Visa Required N288,812 Rome (< 4hrs) 1 stopover Transit Visa Required N289,000 Frankfurt (< 6hrs) 1 stopover Transit Visa Required N290,602 LAGOS TO HOUSTON (ROUND TRIP) Standard Fare ~ N634,294 Aug 19 – 31 Doha (< 9hrs) No Transit Visa Required 1 stopover N262,810 Frankfurt (<4hrs) Transit Visa Required 1 stopover N284,900 Amsterdam (< 6hrs) Transit Visa Required 1 stopover N294,100 Source: FDC Research All standard fares are direct flights 5 | P a g e Financial Derivatives Company Limited 6 | P a g e Financial Derivatives Company Limited Are You Being Ripped-Off? BY AREADE DARE airfares are priced and to do so one must understand the market dynamics that influence their pricing. 1. Amount of competition flying that route The number of major airlines operating a specific route influences airfares; and, the more carriers flying the route, the lower the airfare. Therefore, a route operated by few You’ve probably asked yourself why airfares for carriers tends to be more expensive. certain routes are always pricey. Why some routes 2. Types of passengers cost more than their longer counterparts; or why a Routes that feature many business travelers flight from Lagos to London is more expensive than tend to be priced higher, as business travelers one from Accra to London? At times it may seem are less price sensitive. Additionally, airlines like airlines randomly set airfares, but rest assured may hike up the prices at the last minute. This they do not- and this article seeks to dispel the is because business travelers, who book their mystery behind the perceived madness. flights closer to their travel date, are willing to According to the Centre for Aviation, an October pay the cost necessary to clenching that deal 20121 Accra to London Business Class round trip or making that important meeting.