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Airbus revises up jet demand, warns of ‘lose-lose’ tariff war

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Airbus raised its 20-year forecast for jetliner demand on Wednesday despite expected slower growth in traffic, as it predicts airlines will replace aging fleets with smaller, more fuel-efficient new planes.

The industry faces a squall of new pressures from trade tensions, the partial unwinding of globalization and an anti-flying campaign from climate activists, notably in Europe.

Airbus Chief Commercial Officer,Christian Scherer,voiced alarm about the prospect of a tit-for-tat tariff war between the United States and Europe after the World Trade Organization signaled that Washington can impose sanctions in a long-running dispute over aircraft subsidies.

The European planemaker expects demand for new planes to be led by Asia, where the industry has been enjoying a boom in demand due to the growth of cities and a burgeoning Asian middle class.

Demand from China is expected to leapfrog the United States and Western Europe, while India and new manufacturers like Vietnam are growing the fastest.

In its annual long-term forecast that sheds light on world trends, Airbus predicted the world’s fleet would more than double to 47,680 jets by 2038.

Airbus expects airlines and leasing companies to take delivery of 39,210 new passenger jets and freighters over the next two decades, compared to 37,389 previously forecast, as airlines seek to tap into the fuel savings offered by newer jets.

It shaved its 20-year forecast for average traffic growth to 4.3 per cent a year, from 4.4 per cent.

Airline traffic growth has slowed this year amid trade tensions between the United States and China.

“Increased protectionism and other geopolitical risks remain a concern,” Airbus said in its Global Market Forecast.

Scherer said possible sanctions related to the dispute with Washington over aircraft subsidies had so far had no impact on U.S. demand for Airbus jets.

“Ultimately, they will have an impact on airplanes and therefore the price of tickets and that is not good. If there is an impact, the same impact will happen here in Europe,” he said, referring to the likelihood of European countermeasures.

“It is a lose-lose impact,” Scherer told reporters.

Touting the industry’s record in cutting emissions in a week that Swedish teenage climate change activist,Greta Thunberg, pressed the U.S. Congress for action on climate change, Airbus said the industry could still achieve carbon-neutral growth because new planes are so efficient.

Environmental groups backing a global “climate strike” say more radical steps are needed to avert a disaster.

“We are on a path to de-carbonize but we can’t do it alone,” Scherer said, calling for investment in sustainable biofuels.

Airbus revised up its demand forecast for the industry’s most-sold single-aisle jets by 4 per cent to 29,720 planes,but cut the medium segment including its A330neo, by 2 per cent to 5,370.

It followed U.S. rival Boeing in scrapping separate forecasts for the world’s largest aircraft after deciding to halt production of the Airbus A380 due to weak demand.

It now includes these aircraft with the largest twin-engined jets, with the resulting combined category up 22, to 4,120 jets.

Airbus raised its 20-year forecast for services like repairs, training and cabin upgrades, to 4.9 trillion dollars, from 4.6 trillion dollars.

Once focused mainly on building their jets, Airbus, Boeing and other manufacturers are stepping up competition for a slice of this market to gain access to lucrative recurring revenues. (Reuters/)

AOM/ASH

Edited by Abdullahi Mohammed/

Economy

Oil drops amid new concern over prospects for U.S.-China trade deal

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Oil prices edged lower on Thursday as fresh tensions between the United States and China over ongoing protests in Hong Kong fueled concern that a long hoped-for deal to end a trade war between the world’s top two economies may be further delayed.

Trade experts have warned the first phase of a deal could slide into next year, while markets are wary negotiations might take a hit as the U.S. House of Representatives passed two bills to back protesters in Hong Kong, much to the disapproval of China.

Brent crude futures LCOc1 dipped 22 cents or 0.35 per cent to 62.18 dollars a barrel by 0611 GMT, while West Texas Intermediate (WTI) crude futures CLc1 fell 20 cents or 0.35 per cent to 56.81 dollars per barrel.

Both benchmarks had risen strongly on Wednesday on bullish U.S. crude inventory data.

“Overnight, we saw a rebound of about three per cent in crude futures after a reduction in U.S. inventories,” said Hue Frame, portfolio manager at Frame Funds in Sydney.

“The volatility today can be attributed to concerns surrounding the ‘phase one’ of the U.S.-China trade deal being delayed into 2020.”

The trade war has hit global growth prospects and dominated the outlook for future oil demand, and U.S. President Donald Trump has said he is inclined to raise tariffs on Chinese imports if a trade deal is not reached.

“Market participants … hope that the slowdown in global growth will subside if a deal is struck,” said portfolio manager Frame.

“If (the deal is) delayed, they would more than likely sell off crude with the expectation that global demand for oil will decline during 2020 and beyond.”

The subdued mood took over from optimism after U.S. crude stocks rose by a less-than-expected 1.4 million barrels in the week to Nov. 15, data from the Energy Information Administration showed.

“It was a fall in stockpiles at the key pricing point of Cushing that drove prices higher (on Wednesday),” ANZ Research said. Crude stocks at the U.S. delivery hub of Cushing, Oklahoma, fell by 2.3 million barrels.

Elsewhere, Russian President Vladimir Putin said on Wednesday that Russia and the Organization of the Petroleum Exporting Countries have “a common goal” of keeping the oil market balanced and predictable, and Moscow will continue cooperation under a global supply curbs deal.

The impact of that on the market was welcome, but limited, sector watchers said.

“Russian commitment on an extended supply curb deal, though supportive of oil prices, will continue to struggle against headwinds on global trade issues,” said Benjamin Lu, analyst at Singapore-based brokerage Phillip Futures.

Edited by Abdullahi Mohammed/Tajudeen Atitebi (NAN)

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Economy

Coca-Cola CEO, James Quincey in Africa, Defines Region as Company’s Future Growth Driver

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The Global CEO and Chairman of The Coca-Cola Company (https://www.Coca-ColaCompany.com/), James Quincey culminated in a tour of Africa last week. Accompanied by his extended leadership team, the visit was a testament of Coca-Cola’s commitment to Africa and its interest in the vast opportunity that the continent presents in driving the beverage company’s overarching growth strategy over the next decade.

Visiting Nigeria and South Africa, Quincey met with business and political leaders as the company scales up investments and looks forward to continued growth on the continent. Key among his engagements were discussions with Africa’s foremost entrepreneur and industrialist Dr. Aliko Dangote who stands out as an example of indigenous African investors who are driving growth across the continent.

Other engagements included meetings with top executives from Discovery Group, MTN, Unilever and the Johannesburg Stock Exchange, and thought leaders such as Tony Elumelu (Chairman of Heirs Holding), Doyin Salami (Chairman of Nigeria’s Economic Advisory Council) and Fred Swaniker from the Africa Leadership Academy. These engagements provided Quincey and his team with critical insights about Africa’s opportunities.

“Having operated in Africa for over 90 years as a local business in every country, we believe Africa is a region that will increasingly influence the growth trajectory of our global businesses in just a few years,” he said. “Together with our bottling partners, we continue to reinforce our stake on the continent by accelerating investments that strengthen and scale our capabilities and expand into new businesses to drive our Total Beverage Company aspiration.”

Quincey highlighted a number of positive and encouraging developments across Africa which he described as important foundations for strong economic growth and, if sustained, will fast track the continent’s role as a global growth engine. These include the growing scale of domestic investments by African investors across sectors and the potential of the Africa Continental Free Trade Agreement (AfCFTA).

Added to these were Africa’s positive consumer demographics, the infrastructure expansion in many countries, and the growing emphasis on building African talent.

“It is clear that Africa is indeed a region that will increasingly influence the growth trajectory of global businesses and we have taken some bold measures to strengthen the Coca-Cola System in Africa for long term growth, enhancing our capacity to continue to win in the continent’s increasingly competitive landscape.”

He outlined the company’s growth plans in Africa, including continuously investing to boost capacity ahead of demand, consolidating the bottling system to build scale and investing in new businesses to accelerate growth and expand its beverage offering. He also cited Coca-Cola’s role in spurring Africa’s economy through the eco-system the company has built and continues to foster investments across multiple sectors on the continent.

Underpinning this, he emphasized that the Company is committed to building a talent engine in Africa, creating shared opportunities to enhance the prosperity of communities across the continent.

“We have an enduring belief that our business is only as sustainable as the communities in which we operate, that means for our business to grow sustainably, our communities must grow also.”

This is the strong motivation for the significant investments the company continues to make across Africa to help build more resilient communities, enabling the economic empowerment of women and youth downstream and upstream of Coca-Cola’s supply chain; providing access to clean water, sanitation, and hygiene facilities through its Replenish Africa Initiative (RAIN); supporting governments to strengthen health systems through Project Last Mile and the Safe Birth Initiative; and addressing environmental concerns particularly around plastic packaging with its World Without Waste vision.

Said Quincey: “Over the past 90 years together with our bottling partners, we have built pervasive and very strong local businesses, creating shared opportunity in every country on the continent. This has been one of our greatest strengths and we will continue playing a significant role in Africa’s sustainable and inclusive growth”.

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Economy

DMO offers N150bn from 3 instruments

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The Debt Management Office (DMO) on Wednesday offered N150 billion from three Instruments. five- year, 10-year and 30-year bonds for N50 billion each to investors at the auction.

The statement issued by DMO in Abuja indicated that the bond Auction by the DMO which took place on Wednesday, Nov. 20, was highly oversubscribed.

The DMO explained that the total subscriptions received through Competitive bids for the instruments at the Auction was N252.35 billion, indicating a subscription level of 168.23 per cent.

It said that the trend of investors’ appetite for the longer tenored instruments continued with subscription of N115.09 billion or 230.18 per cent for the 30-year Bond.

According to the statement, the successful bids are allotted at the rate of 12.0000 per cent for the 5-year, 12.9300 per cent for the 10-year and 13.3900 per cent for the 30-year Bonds.

“The allotment rates indicated a significant decline from the rates at which the Bonds were issued at the October 2019 FGN Bond Auction.

“The total amount allotted for Competitive Bids was N157.93 billion across the three tenors. In addition, the sum of N95.00 billion was allotted through Non-Competitive Bids for all the tenors at the same rates as the Competitive Bids.

“Overall, the sum of N252.93 billion is allotted to investors at the auction through both Competitive and Non-Competitive Bids” it added.

Edited by Ese E. Ekama (NAN)

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Economy

Customs promotes 2,508 officers to various ranks

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The Nigeria Customs Service Board has promoted 2,508 officers to various ranks.

The Customs’ Public Relations Officer, Mr Joseph Attah made this known in a statement in Abuja on Wednesday.Attah said the board also approved the appointment of DCG David Chikan, ACG Kashim Ajiya, ACG Dinatu Umaru and ACG Yusuf Bashar as members of management.

He said 30 officers were promoted from Deputy Comptroller to Comptroller while 115 Assistant Comptroller were elevated to Deputy-Comptroller.

He further disclosed that  the board also approved the promotion of officers from Chief Superintendent of Customs to Assistant Comptroller and 43 Superintendent of Customs to Chief Superintendent.

According to him, 117 Deputy Superintendent to Superintendent and 565 Assistant Superintendent I to Deputy Superintendent of Customs.

Attah added that 988 Assistant Superintendent of Customs II to Assistant Superintendent of Customs I as well as 505 Inspectors of Customs to Assistant Superintendent of Customs II.

He said the promotion took effect from Jan. 1, 2018.

The spokesperson stated that the Comptroller-General of Customs, Col. Hameed Ali (Rtd) while congratulating the new members of management and the promoted officers, charged them to see their elevations as a call to greater responsibilities.

According to Attah, the customs boss urged them to double their efforts to consolidate on the gains of the on-going Service reforms.

Edited by Olawunmi Ashafa/Ese E. Ekama (NAN)

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Economy

120 SMEs for Lagos MegaCity Fair — Organiser

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No fewer than 120 small businesses from across the country are expected to participate in this year’s Megacity Fair which opens on Friday at Amuwo Odofin Festival Mall in Lagos.

Convener of the Fair, Ifeoma Emenahi, told journalists in Lagos on Wednesday that the three-day event would offer free master classes for women to acquire new skills that would empower them financially.

She said that the 8th edition of the Fair, tagged, ‘Black Friday Sales’, was aimed at supporting vendors and small businesses to network and showcase Made-in-Nigeria products.

“The event this year is not just for the visitors to come and buy, but also for them to come and learn, adding value to themselves.

“We want to empower the women with skills by teaching them how to make headgear like facinators, auto gele and turbans.

“There’s also a master class where they will be taught how to make accessories using Ankara fabrics; all these will be taught for free,” she said.

She added that the Fair would also feature red carpet events, raffle draws, games and bouncy castles to keep the visitors entertained.

“If visitors come to the fair and they find it dull, they won’t come back again but if they are entertained, they’ll be happy to stay,” Emenahi, said.

Edited by Wale Ojetimi (NAN)

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Economy

FAAC: FG, States, LGs share N702.058bn for month of October

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 The Federation Accounts Allocation Committee (FAAC) on Wednesday shared a total of N702.058 billion to the three tiers of government for the month of October.

This was announced in a communique read by Accountant General of the Federation, Mr Ahmed Idris after the FAAC meeting in Abuja.

Idris said that N702.058 billion comprised revenue from Value Added Tax (VAT), Exchange Gain and Gross Statutory Revenue.

He explained that the Federal Government received N295.7billion, the States got N192.697 billion, and the Local Governments received N144.9 billion.

He stated that the oil Producing states received N49.1 billion as 13 per cent derivation revenue and the Revenue Generating Agencies got N19.472 billion as cost of revenue collection.

He, however, disclosed that the gross statutory revenue for the month of October 2019 was N596.041 billion

He added that it was lower than the N599.701 billion received in the previous month by N3.660 billion.

He said the revenue from VAT was N 104.910 billion as against N92.874 billion disbursed in the preceding month with an increase of N12.036 billion recorded.

According to him, the  exchange gain yielded a total revenue of N1.107 billion.

He said as at 20th November, the balance in the Excess Crude Account was 324 million dollars.

He further stated that from VAT, the Federal Government received N15.107 billion, the States got N50.357  billion, the Local Governments received N35.250 billion while the Revenue Generating Agencies had N4.196 billion.

He acknowledged that for the month of October, revenues from Companies Income Tax (CIT), VAT and import duty increased remarkably, while Royalties, Petroleum Profit Tax (PPT), and Excise Duty decreased significantly.

Idris noted that the committee was glad with the increase in revenue and expressed hope for its sustainability.

Edited by Felix Ajide (NAN)

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