The Impact Of Coronavirus On The Aviation Sector In Nigeria: A Case Study Of Airpeace Airlines
1.1. Background to the Study
Coronavirus(COVID-19) which was first detected in Wuhan, China, is a respiratory illness that is caused by the SARS-CoV-2 virus. This virus was officially announced by the World Health Organization (WHO) on 30th January (World Health Organization, 2020), 2020 as a public health emergency of international concern. The source of coronavirus still remains unknown till date. This highly contagious disease is transmitted from one person to another mainly by close contact with the respiratory droplets from an infected person. Symptoms of this virus may appear between two and fourteen days after being exposed to an infected person and object. The symptoms include cough, fever, tiredness, loss of taste or smell, shortness of breath, sore throat, headache, chest pain, conjunctivitis, fatigue, diarrhea, etc. Infected patients are advised to practice self-isolation at home if the symptoms are mild, but if they’re severe, these patients are advised to lodge into a hospital in order to get proper medical attention. The most effective prevention technique is to wash hands regularly, sanitize hands with an alcohol-based sanitizer, avoid touching your face, nose and mouth. Other preventive measures include wearing a face mask, practicing social distancing, covering the mouth and nose with tissue or bent elbow when sneezing, cleaning and disinfecting frequently touched surfaces, avoiding hand shaking and hugging people, practicing self-quarantining if sick, etc. The test for coronavirus involves inserting a 6-inch-long swab into the cavity between the nose and mouth for fifteen seconds, rotating it frequently (UC Davis Health, 2020).
In order to control the current outbreak of this disease, steps have been taken across the globe and these steps include banning both domestic and international flights, admitting lockdowns in areas that are vulnerable, isolating the infected patients, administering tests for the virus to suspected individuals, social distancing, etc. These steps have helped a great deal in controlling the spread of coronavirus. However, the steps were introduced a little too late as countries had already started suffering the effects of the virus. One of the many countries that suffered greatly due to this unplanned pandemic is Nigeria.
The aviation sector is an economic sector that deals mainly with the manufacturing, operating and flight of aircraft. The two major types of aircraft in the aviation sector are helicopters and airplanes. The aviation sector is a vital sector in any economy as air travel is the fastest and most convenient way of traveling. It’s also the fastest way of carrying large shipments across borders. It provides a country with a lot of benefits such as employment generation, tourism, promotion of global trade, provision of linkage in the global supply chain etc.
The aviation sector in Nigeria was the most affected sector as both domestic and international flights were suspended in order to prevent the spread of the virus. Only essential cargo, medical supplies, personal protective equipment and food were allowed into the country. This act greatly affected the airline industry in Nigeria as it led to cancellation of flights, empty airports, and eventually, laying off of workers. Before the crisis, Aviation made a contribution of $1.7 billion to Nigeria’s GDP and it also supported 241,000 jobs in Nigeria (IATA, 2020). We can therefore say that the aviation sector played a major role in facilitating Nigeria’s economic growth and development. According to the International Air Transport Association (IATA), in Nigeria, an estimate of 124,000 jobs and $900 million of the country’s GDP was at risk (IATA,2020). Nigerian Aviation Minister, Hadi Sirika, also reported that the aviation sector was losing N21 billion per month, and that many airlines would not emerge from the crisis (Hadi, 2020). Apart from this loss of revenue, other problems that came along with the banning of flights were that Nigerian airlines have their aircraft on lease and their contract continues until its expiration date, the high cost of servicing that would be needed once airports were back in operation and the problem of the failure of airlines to refund flight tickets to passengers as the airlines weren’t financially equipped to do so.
Currently, the ban of both local and international flights has been lifted, but there’s still a great need for the government to intervene in the aviation sector in order to prevent it from being wiped out. Policies need to be implemented and enforced to ensure that the interests of the stakeholders of this sector is protected.
1.2. Statement of the Problem
The aviation sector is the major sector that promotes global trade due to its competence to carry various shipments at once. However, this sector was greatly disrupted by the travel bans that were placed by governments in order to control the spread of coronavirus. This meant that both local and international airports in Nigeria had to be shut down and about 120 domestic aircraft had to be grounded, leaving the sector with no source of revenue. This action greatly affected tourism, it placed the aviation industry in much debt, it resulted in the postponement and cancellation of events, it led to increased competitive pricing and caused employees their jobs, it led to high maintenance costs of the grounded airlines, it also brought about the issue of flight ticket refunds, etc.
Due to the loss of jobs, lower volume of exports and loss of revenue from the aviation sector, Nigeria’s GDP has crippled and the economy is on the verge of collapsing.
The need for government intervention cannot be overemphasized as it’s the last resort. The aviation sector is in great debt and it needs the government’s support in the form of finance and relief plans, otherwise, the aviation sector would cease to exist. Currently, there has been no significant support from the government to the aviation sector
1.3. Aims and Objectives
The primary objective of this study is to determine the impact of coronavirus disease on Airpeace airlines and the specific objectives are:
- to identify the major issues being faced by Airpeace airlines.
- to evaluate the steps taken by the government in reducing the effect of coronavirus on Airpeace airlines.
iii. to determine the impact of the shutting down of airlines on Nigeria’s economy.
- to make recommendations on how to reduce the losses of Airpeace airlines.
1.4. Research Questions
- What are the issues being faced by Airpeace airlines?
- Are there any measures put in place by the government to reduce the effect of coronavirus disease on Airpeace airlines?
iii. Did the shutting down of airlines in Nigeria have an impact on Nigeria’s economy?
- What are the solutions to reduce the losses of Airpeace airlines?
1.5. Statement of the Hypothesis
This hypothesis is classified into null (H0) and alternative hypothesis(H1):
H0: Coronavirus disease has no effect on Airpeace airlines.
H1: Coronavirus disease has an effect on Airpeace airlines.
H0: The shutting down of airlines in Nigeria doesn’t have an impact on Nigeria’s economy.
H1: The shutting down of airlines in Nigeria has an impact on Nigeria’s economy.
1.6. Significance of the Study
This study would aid readers in developing an understanding of how the aviation sector, specifically Airpeace airlines, was affected by the Coronavirus. It would help to evaluate the impact on the shareholders, the employees and the Nigerian economy.
In addition, it would help to proffer policies and solutions to the government that might help to ease the effect which the Coronavirus had on the aviation sector. It could also serve as a reference material for students in academic research.
1.7. Scope of the Study
This study is focused on the aviation sector in regard to evaluating the impact of coronavirus on Airpeace airlines and to proffer recommendations to the government on what can be done regarding this issue.
1.8. Organization of the Study
This study has been organized into 5 chapters. Chapter 1 of this study focuses on the introduction of the study. Chapter 2 discusses the literature review both theoretically and empirically. Chapter 3 is aimed at the research methodology as well as the procedures used for data collection and analysis. Chapter 4 deals with data analysis and presentation of results. Chapter 5 deals with the summary of findings, conclusions, and as well as recommendations for further research.
1.9. Definition of key terms.
The main terms are defined as follows:
- Coronavirus: a respiratory illness that is caused by the SARS-CoV-2 virus.
- SARS-CoV-2 virus: It stands for severe acute respiratory syndrome coronavirus 2. It is responsible for COVID-19.
- Virus: This is a microorganism that causes diseases in living things.
- Disease: This is any harmful deviation from the normal structural or functional state of an organism characterized by specific signs and symptoms.
- Pandemic: This is the spread of a new disease globally.
- Isolation: The state of being in a place that is separated from others.
- Social distancing: The practice of maintaining a safe space between yourself and other people who aren’t members of your household.
- Lockdown: This is a situation whereby the free movement of individuals are restricted as a security measure.
- Aviation: An industry that deals with the practice of flying in air.
- Sector: This is part of a company’s economy or business.