Thursday , 15 April 2021
Home / Analysis / N5b Aviation bailout: industry investors, lawmakers and players seek upward review
Minister of Aviation Hadi Sirika and the Managing Director of the Federal Airports Authority of Nigeria (FAAN) during the three-day Public Hearing on the amendment of the Civil Aviation Amendment Bills of the six aviation agencies in Abuja

N5b Aviation bailout: industry investors, lawmakers and players seek upward review

STAKEHOLDERS are of the opinion that the Federal Government needs to improve on its announced N5billion COVID-19 intervention funds for the aviation sector as the sum will not have much impact in meeting the sector’s challenge.

Minister of Aviation, Senator Hadi Sirika had in Day one of a three day public hearing hosted by the Senate Committee on Aviation on amend six (6) executive bills to amend the act of aviation agencies announced the N5bn palliative.

Sirika who stated that the government has provided N5bn with N4 billion going to airlines and N1bn for disbursement to other businesses.

Senator Sirika who spoke in reactions to the opening remarks of the Chairman of the committee said,” Federal government has proposed N4bn for airlines and N1b for other businesses. We are putting criteria in place for the disbursement of the funds.”

However reactions have continued to trail the announcement, most of which are calling for a review upwards of the funds.

Chairman West Link Airline, Captain Ibrahim Mshelia who lauded the Federal government for the gesture appealed for an upward review to about a trillion naira for the sector as N4billion was grossly inadequate.

“If you look at the contribution aviation does for the country and the effects of the pandemic itself, it hits aviation more than anyone else and I would only plead that the government should rethink it and look at it because there is no economy that would grow in this modern time without aviation.”

Captain Mshelia who spoke in a radio interview monitored by Nigerianflightdeck, stressed that the Minister needs to do more in convincing the Federal Executive Council of the genuineness of airlines’ cause.

He said, “if we don’t take time to look at it critically and support aviation, we stand the risk of having our airlines eliminated one by one and in reality, we are suffering, really suffering.”

In suggesting the N1trillion bailout, Captain Mshelia listed areas were funds were needed urgently by airlines including aircraft maintenance, training and retraining, spare parts, Jet A1 etc.

“Somebody can’t afford to take his money and buy an aircraft, he has to borrow money, so if you don’t pay the lessor or the financier, he will take his aero plane away that is the major thing. Maintenance is like giving food to service the body which also is very important, we have training, aviation requires a lot of training and retraining all the time, that’s huge sums of money, we have to stock spare parts, you don’t have to wait until your aero plane breaks down before you order parts, we also have to pay for Jet A1 too”.

Lead Consult, ETIMFRI Group, Mr. Amos Akpan also agreed that the N4b proposed funds was small but advised that airlines to collect but also pressure for more as the situation is dire for them and immediate intervention is needed.

He said,”On the N4billion bail out offered. I plead with NASS, the minister, and the operators to collect it first. Quickly make it available for the operators in few days. The situation is dire. Then we continue to press for more.

“While grappling with the effects of covid-19, the effects of #endsars came in. Operators have to go back to restrategize. N4billion is small but let’s have it in as reality first, then we press further, he said.

Head of Research, Zenith Travels, Olumide Ohunayo who spoke to Nigerianflightdeck is of the opinion that the bailout should be no less that N100billion and that the inability to get it this far is a big issue.

He argued that already airlines on other climes are already accessing the second tranche of bailout which includes a reduction of service charges to about 50% which is currently ongoing in various parts of Europe.

Ohunayo said,”Sincerely, I think that N4billion for bailout is grossly inadequate and the timing is a bit too late for me. I think that four billion there only one airline should need that and for me, all airlines that have their AOCs who are cleared of debt to the agencies to a point should be the ones getting the benefits be sure the same agencies they are owing also need funds, so that should be a criteria.

“If you are owing do much debt you have to negotiate with the agency. I support the bailout should be released earlier than now. At this point whereby all over the world the COVID-19 has spiked again, at this point countries ar already going for the second tranche of palliatives .

“And this second tranche has graduated from cash to service providers who are asked to cut service fees to about 50-30% that’s what we are talking about that they are in the second stage so for me ours is a bit late and this can affect the industry. Fast forward that process and increase the bailout.

On what the funds should be,”I don’t think anything less than N100b is too big, it’s not like you’re giving them this money free, it will be a loan and they will pay back.if you’re given them free, I’d say yes it’s okay but you are not, so bring out the conditions let’s see how the condition favors them or are we waiting for new airlines to come and join them?

“You cannot do for airlines who are dead or who are just coming in or who do not have AOCs? For me, this should be strictly for the scheduled operators. For nonscheduled operators it is a class service and should feed the system.”

Chairman Senate Committee on Aviation Senator Smart Adeyemi also after the declaration told the Federal Government through the minister that its proposed N5billion COVID-19 intervention fund is inadequate and unacceptable as it will not be enough to save jobs in the industry or keep aircraft in the air.

Senator Adeyemi said that it is the opinion of the committee that the money proposed is a far cry from what will keep the airlines afloat and keep jobs in the industry.

” I do not think that N4bn is what we are talking about if we do not want the civil aviation to park their aircraft and let go of their staff. N4bn for airlines is too small .

” We do not want a situation where airlines will have to be cutting corners that would be too wrong for aviation, Adeyemi said,” I recall . that the United States gave and are giving airlines bailout staggered. I am not saying we are the US but we plead that the federal government takes a look at this and increase it.”


About NigerianFlightDeck

Nigerianflightdeck is an online news and magazine platform reporting business stories with a bias for aviation and travel. It is borne out of the intention to inform, educate as well as alter perceptions with balanced reportage.

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