By citybusinessnews@yahoo.com –
For the year ended December, 2018, Med-View Airline recorded loss after tax of N10.33Billion.
In a notice to the Nigerian Stock Exchange (NSE) ahead of its 3rd Annual General Meeting (AGM), the company described the year 2018 as “one of the most challenging in the Airline’s recent history”.
In the notice obtained by City BusinessNews (www.citybusinessnews.com) and dated March 29, 2019, chairman of the company, SHEIK ABDUL-MOSHEN AL-THUNAYAN explained that the effect of the economic downturn in Nigeria continued to impact adversely on “our operations as there was reduction in credit opportunities which in turn affected our income”.
He added: “This harsh environment of multiple taxation from the authorities, along with the continued lack of infrastructure especially MRO (Maintenance Repair and Overhaul) facility in Nigeria added to our cost of doing business.
“Nevertheless, with the capable hands at the helm of affairs, we continually strove to ensure that we developed our business as much as possible and also tried to diversify.
“The period in review will confirm the trying times under which we operated”.
Part of the notice read: “Med-view commenced scheduled flight operations to the United Kingdom in late 2015, the venture has had its good and bad side of the business.
“Good side in terms of revenue generation and bad side in terms of passenger reprotection and Aviation Politics (Aviopolitics).
“The airline operated that route with a leased aircraft from a European based Aviation Leasing company, that enable Med-View to venture into European Airspace in the first place Med-View and the Leasing Company had over the years enjoyed a long-time partnership that had yielded close to $80,000,000 (Eighty Million dollars).
“But, during the course of the London operations, the Aircraft that was leased to Med-View had an AOG (Aircraft On Ground) in December 2017.
“Accordingly, it resulted in Med-View re-protecting passengers at double/triple the price of the ticket on other carriers like Virgin Atlantic, British Airways and Air Maroc to mention but a few.
“The passenger reprotection exercise is an industry standard practice that enables Airlines to put their own passengers on other Airlines when scheduled flight cannot be operated. This is done at the fare of the operating Airline regardless of the amount paid by the passenger to the original carrier.
“Med-View airline adhere seriously to industry practice and with the contract of service to our esteemed passengers, and in other not to disappoint them, Med-View conformed with the airline practice to salvage the situation.
“The political tension and extremely tight market liquidity in Nigeria affected economic growth of Med-View.
“The depleted aircraft fleet due to C-Check at the early part of 2018 and reprotection exercise also contributed to the decline in the revenue of the Company.
“The revenue in 2018 was flat when compared with the same period in 2017. The Gross Profit however reduced by 293% in 2018 over last year.
“The airline closed the year with a loss after tax of 10.33billion. The performance of the airline was adversely impacted by the partial stagnation in the revenue generation (passenger traffic/cash in-flow) due to the lack of aircrafts and high cost of maintenance and improvement items due to foreign exchange fluctuation. Nevertheless, the airline will continue to seek for ways to improve services with the addition of the aircrafts from C-Check.
“Despite the strong headwinds which confronted our airline’s revenue throughout the year, the airline was able to balance itself but recorded a loss after tax of 10.33 billion which was lower than prior year profit of 1.25 billion.
“The operating environment remained highly volatile characterised by lack of infrastructure and foreign currency shortages as the depletion/fluctuation of dollar continued unabated. The aviation sector remained highly taxed and has witnessed the issue of double taxation on numerous items unresolved even after the government made promises to reduce it.
“Other airlines are not spared of the adverse impact of these difficult operating conditions”.
The company explained that in its utmost wisdom decided to downgrade the staff strength of the company.
“This was done in three (3) different trenches where approximately One Hundred (100) of the work force were laid off pending when the situation of the airline stabilises.
“Most of those affected were the crew and out-station staff. The Management wishes and states with all honesty, that they appreciate all the staff of the company and it was with a heavy heart that such decision had to be made.
“The Management also promise that once the economic situation of the country stabilises, the retrenched staff will have priority when it is time for recruitment”.
