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Airline operators seek financial bailout from Government

By BusinessNews Staff on June 20, 2015

Nigerian domestic carriers are requesting for financial bailout from the federal government due to losses they incurred during the recent fuel crisis and hostile operating environment, THISDAY investigation has revealed.
A highly placed aviation industry source, hinted that about N500 billion that would have been used to assist the airlines through the Bank of Industry (BOI) during the tenure of Stella Oduah as Minister of Aviation was believed to be domiciled with the Central Bank of Nigeria (CBN).
According to the source, the funds would have been given to the airlines through the issuance of bonds and the certificates signed by the airlines but this plan did not materialise before Oduah was removed from office.
Some of the airline operators spoken to said they only heard then that the money was domiciled with the CBN, but that there was no written document to show that such arrangement was in place.
However, airlines operators are requesting that government should revisit the plan.
They are demanding that such assistance should come in form of grant, which will be monitored by the Nigerian Civil Aviation Authority (NCAA).
Describing the Nigerian operating environment as harsh, the airlines noted that prevailing scarcity of aviation fuel was a contrivance by marketers because government shaped the environment that enabled them to create artificial scarcity even when the Jet A1 is deregulated.
They also pointed out that their operations are restrained by the non-availability of airfield lighting at most of the Nigerian airports, as airlines are forced to limit their services to these airports only as daylight flights.
Deputy Managing Director, Arik Air, Captain Ado Sanusi said airlines want direct grants and not intervention fund.
“We don’t want intervention fund. We want outright grant to be given to the airlines directly, not through the banks.”
According to Sanusi, the NCAA should be used by government to monitor the usage of the money by the airlines. He said the airlines should be given certain conditions, which may include meeting the IATA Operational Safety Audit (IOSA) standard, acquiring a certain number of aircraft and training of indigenous manpower.
He said: “Any airline willing to abide by these conditions should be allowed to access the grant after which it would be closely monitored by NCAA on the disbursement of the funds to aid its operations. NCAA should ensure that such funds are used for aircraft acquisition, maintenance, training and IOSA certification. So NCAA should monitor the airline’s financials.”
Also, the CEO of MedView Airline, Alhaji Muneer Bankole said what government should do is to support local carriers that create jobs, instead of over taxing them despite their invaluable contribution to the development of the country.
Bankole noted that in some countries that produce oil, aviation fuel is sold to indigenous carriers at subsidised rates as part of government’s support to the airlines.
He, however said there should be accountability if government decides to support the airlines, and expressed the regret that no one monitored the intervention fund given to the airlines in the past.
“The government in the past had given intervention fund, nobody asked questions how it was spent; that is why we find out that we are not honest and sincere people. We have had a cause to have over N100 billion intervention fund, some airlines accessed the money, but did not give account how they spent the money,” Bankole said.
Reacting to the possible funds domiciled in CBN that was meant for the airlines, the Executive Chairman of Airline Operators of Nigeria (AON), Captain Nogie Meggison said that he could not confirm whether there was any money because all that was heard did not reflect on paper; that it was all rumours
“I heard about the money, but I did not see any paper to confirm it,” Meggison said.