What is Happening to the Airlines?


Monday, September 05, 2016 11:32am / NASD Plc

Local air travel passengers received the surprise news of the exit of Aero Contractors and First Nation Airline from the market.  First Nation is the 7th airline to suspend, withdraw or close outright its operations in Nigeria in 2016 alone.  

The recession is the obvious suspect – more cash constrained passengers, a shortage of Foreign Exchange and a difficulty in securing a core input (aviation fuel) will test the resilience of most enterprise. 

But in one of the most capital intensive industries in Nigeria, the challenge of covering fixed asset maintenance and asset replacement is an even more pronounced factor affecting the long term sustainability of each company.

The Nigerian Civil Aviation Authority (NCAA) caps the average life of an aircraft at 22 years, after which the aircraft will need to be scrapped.  As at 2016, the average life of aircraft in Nigeria is between 18-20 years.  As early as in 2 years’ time, players in the Nigerian Airline industry will need to start replacing their fleet.  Ball park figure for a decent set of wings is about $67.5m!

So, over the next 4 years, the airline industry will need to invest approximately $2.1 billion in new aircraft.  At NASD we suspect not many of these companies have the reserves in cash to meet this investment need.  They will therefore need to raise new capital – after mitigating Investor risk perception.

We believe the capital market will start to see very innovative structured bond certificates where the mobile new underlying aircraft acts as collateral to protect against default. We expect a growth in the nation’s leasing and insurance businesses as these aircrafts leased to interested airlines. We also anticipate a gradual increase in sophisticated investors who are seeking this particular risk/ return balance over the life of the instrument.

NASD OTC as an Alternative Investment Market is responsive to such requirements.  We continue to position to embrace such structured products and look forward to creating liquidity… transparently for the aviation business in Nigeria.

Air Liquide Plc Approved To Trade On NASD OTC Market                           
NASD is happy to announce that the shares Air Liquid Plc has been approved to for admission to the NASD OTC Market.

Air Liquide is the world leader in gases for industry, health and the environment. The Group offers innovative solutions based on constantly enhanced technologies and produces air gases (oxygen, nitrogen, argon, rare gases...) and many other gases including hydrogen.

All shareholders are advised are hereby advised to contact their brokers for further information on how to trade the security on the NASD OTC Market.

New Participating Institution (Pi) Admitted to NASD OTC Market
NASD is pleased to welcome a new Participating Institution to the market. The Participating Institution satisfactorily meets the requirements to become a member of the NASD OTC market.

All investors are hereby advised that they can complete their transactions through our Participating Institutions. This brings the number of Participating Institutions on the NASD OTC Market to 117.

We wish them successful trading on the NASD OTC platform

As at Friday, 02 September 2016, the index closed at 645.21 points (down 0.70% on previous close of 649.73 points).

TOP 5 TRADING SECURITIES 2016  (YTD-02 September 2016)

Top 5 Trading Securities (YTD) - By Value

PI ACTIVITY - For the Week Ended 02 September 2016

Top 10 by value – week ending 02 September, 2016

Top 10 by volume – week ending 02 September, 2016

Market in Numbers (YTD – 02 September 2016)

Macro-Economic Indicators 02-September -2016

Closing Prices AS AT 02 September 2016

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