COVID-19: Olowo says N2tr economic injection not enough for passenger airlines alone

PRESIDENT, Aviation Round Table (ART), Dr. Gabriel Olowo has said the proposed injection of N2 trillion to jump start the nation’s  economy post COVID-19 will not be enough for passenger airlines alone and has recommended a three(3)year grants, 5% interest rate loans, tax waivers and VAT exemptions among others to save the country.

Dr. Olowo in a statement sent to the aviation reporters said the planned injection for the aviation sector is a necessary condition for survival of the sector that has not been quite strong and competitive prior to COVID-19 stating that failure to would have been insensitive.

He said,” It (injection of funds into aviation) is a necessary condition for survival of the sector that has not been quite strong and competitive prior to COVID- 19. Failure by government not to would have been unprofessional and insensitive. Kudos, to Sirika and his team. Read this also: COVID-19: FG says aviation sub-sector to benefit from N2tr economic injection

On measures government can adopt to ensure the money is well administered, Dr. Olowo said,” N2tr which is approximately US$5Billion, may not be enough for Passenger Airlines alone not to talk of quiet airports, GDSs TMCs, OTAs, travel agents, ground handlers, catering and the entire supply chain for loss of business and negative impact of COVID-19 during the lockdown and flight restrictions.

“Best approach will be to do 3-year average business revenue of stakeholders and prorate their losses for grants. Or pay wage bill for initial period of 6 months covering Quarter 2 and Quarter 3, 2020 to prevent job losses. Option of loans and loan guarantees at less than 5% interest rate should be considered. 2020 Tax waivers, Vat exemptions, tax holidays, etc.

He regretted the extension of the ban on flight activities as announced by Presidential Task Force on COVID-19 for an additional four weeks but stated that the nation has not been able to flatten the curve with the ratio of confirmed and discharged cases moving higher rather than reducing.

“Regrettably data has confirmed that we have not been able to flatten the curve. Ratios of Confirmed / Discharged cases have also not improved. It moved from 5:1to 6: 1 rather than reducing, a very negative signal. Given that social distancing is practically impossible in aviation business, a sufficient condition for health and safety is to defer flight operations.”