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Govt to rescue airlines with $500 million lifeline

By on November 27, 2012

Aviation Minister, Stella Oduah

THE Federal Government may have concluded plans to rescue the nation’s ailing aviation industry with the injection of $500 million for the procurement of new aircraft.

According to Aviation minister, Stella Oduah-Ogiewonyi,  government this time will not release the intervention fund to the airline directly, but will help them negotiate with lessors and manufacturers for the supply of modern aircraft to be paid for by the government.

A ministry source told The Guardian on Monday that the government had already secured $500 million for the acquisition of aircraft for the airlines.

Already, the government has opened talks with representatives of Embraer Aircraft manufacturer from Brazil on the subject matter.

The company’s representatives were led by the senior Vice President operations and Chief Operating Officer, Luis Carlos Affonson, at the talks initiated by managing Director of Federal Airport Authority of Nigeria (FAAN), George Ureisi.

Ureisi told the Embraer Executives that the Federal government has altered its strategy for the development of the aviation sector in respect of domestic airlines, with its intention to assist them increase their fleet with new aircraft from reputable manufacturers around the world.

He emphasised the need for the use of proper equipment (aircraft) by domestic operators, hence the need for government to intervene directly in the acquisition of aircraft that are effective, efficient and appropriate for the region/routes.

“Domestic Carriers use wrong equipment for most of their operations. There is no established record of sustainability for these airlines mainly because of the use of wrong equipment. Intervention fund by the federal government in the past to assist them re-fleet has failed because there is no evidence that the money was ploughed back into the airlines.

‘’Government wants to change this model entirely by floating a fund for the acquisition of new aircraft for the domestic carriers. In this regard, government is seeking a partnership with Embraer that will lead to a discussion on how these new aircraft will be procured at very competitive, fair, and concessionary rates”, Ureisi told his hosts.

Speaking on behalf of Embraer, Luis Carlos Affonso said the company was disposed to the opportunity to work, partner and collaborate with the government of Nigeria in its desire and determination to assist domestic carriers to acquire new and more efficient fleet.

Affonso said Embraer considers the African market as a very important one, adding that market indicators show that the number of aircraft in the continent would double in the next few years. “Nigeria will certainly be leading this expansion in Africa and we will be very delighted to be part of that growth and expansion”.

He said Embraer manufactures robust, effective and low operating cost aircraft that will suit the Nigerian market, adding that once the needs of the domestic carriers are determined, the company can manufacture equipment that will be custom-made for the region/routes.

 

Source: Guardian

2 Comments

  1. J Jakpa

    November 27, 2012 at 5:52 pm

    Take a look at the minister, does she look like she has a clue what aviation is all about?? she should be home making babies..

  2. Obinna

    November 27, 2012 at 7:12 pm

    People!!!! This is just an opportunity for the minister and her cronies to chop money! Isnt this obvious, LOTS of things go into picking planes. Routes, maintenance contracts, pilot certifications etc. How can the govt just buy plans for airlines on their behalf. I cant believe this is actually going through. People! Wake up. Say something.