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Domestic airlines deny collecting FG’s intervention fund

By on August 1, 2016

Domestic airlines have denied receiving any form of funding from the Federal Government in the last 30 years to improve their business.

The Airline Operators of Nigeria said none of its members is a direct beneficiary of the N120bn reportedly released to the aviation sector out of the N500bn intervention fund for the power and the Small and Medium-scale Enterprises sectors in 2011.

But the Governor of the Central Bank of Nigeria, Godwin Emefiele, had last month at the Senate Committee on Aviation and Anti-Corruption’s public hearing in Abuja, named Air Nigeria and Chanchangi Airlines, Arik, Dana, Aero Contractors, Kabo, Overland, First Nation and Odenegene as beneficiaries of the aviation intervention fund. Emefiele spoke through a director of the bank, Mudashiru Olaitan.

The Chairman, AON, Captain Nogie Meggison, however, said, in a statement obtained by one of our correspondents on Friday, “Contrary to what most people in the public think, the (domestic) airlines never received any direct funds from the Federal Government intervention. Rather, what happened was that the funds released went to the banks in an effort to keep them afloat for bad debts owed to banks by the airlines during a period of economic recession of 2011.

“Like any other highly capital intensive private entity doing business in Nigeria, that might be in need of funds, airlines are free to and do approach the banks for loans, which are serviced regularly at stipulated interest rates.”

He also said that domestic airlines were overburdened with numerous charges from government agencies, taxes, overheads, high bank loan interest at 26 per cent and excessively priced aviation fuel at N200 per litre.

He added that with the scarcity of forex, domestic airlines on a regular basis struggled to meet repairs and maintenance costs, purchase of spare parts, as well as the training of pilots and other technical personnel abroad.

“It is really sad that despite these burdens on the shoulders of the Nigerian airlines, which leave them barely able to make ends meet; airlines are still expected by the Federal Inland Revenue Service to pay taxes out of their losses.

“This makes the cost of operating an airline, more expensive in Nigeria than anywhere else in the civilised world today due to multiple and excessive taxation from the various aviation agencies,” Meggison said.

He called on the Federal Government as a matter of urgency to forge a strategy to bring all parties to the negotiating table, and for the first time, seek direct intervention funding for airlines in order to save the aviation system from collapse.

“Nigerian airlines create about 90 per cent of the full time employment in our aviation sector today locally and internationally. We remain a pivot to the Nigerian economy and one of the main catalysts to economic recovery and national progress through the critical services we provide daily,” Meggison said.

The AON’s position was recently corroborated by the Minister of State for Aviation, Hadi Sirika, during the Senate hearing on the disbursement and utilisation of $40m Afrixim loan and N86.6bn Federal Government intervention fund held at the National Assembly complex, Abuja in June.

Sirika had said, “If money was sent to a bank for a specific purpose and it was used for other purposes not directly to the airline account, then that matter should be looked into seriously.”

The Chairman, Senate Committee on Aviation, Senator Hope Uzodinma, had also noted that since the money never got to the airlines, neither was it used for the purpose of revamping the airlines’ airplane fleet, it should not be called an aviation intervention fund.

He called for an investigation into the matter, arguing that the money was not meant to help the aviation sector but to rescue some banks from going under.

 

[Punch]