18 local airlines jostle for N27bn aviation bailout fund

Posted by News Express | 12 July 2020 | 619 times

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There are indications that a total of 18 local operators have submitted formal application for the N27b aviation bailout fund proposed by the Federal Government.

Three operating commercial airlines – Dana Air, Max Air and Azman Air – were among the 18 that have sent requests to the Central Bank of Nigeria (CBN) for consideration. Conspicuously absent as at press time on Saturday, were Air Peace, Arik Air, Aero Contractors, Ibom Air, and Overland Airways.

But included on the list are scheduled and non-scheduled airlines that quit operations about two years before COVID-19. There are also arguments that some of them still hold valid Air Operator Certificates (AOC) that qualifies them as operating airlines.

In a related development, commercial flights to Port Harcourt International Airport (PHIA), Omagwa, Rivers State, on Saturday, resumed with airlines reconnecting the region with Lagos and Abuja. One of the airlines that reopened the route, Arik Air, operated the first flight at 7:00a.m., and scheduled another for 3:00p.m. from Lagos.

As parts of efforts to mitigate the devastating impacts of the coronavirus pandemic and attendant lockdown of the airspace, the Federal Government pledged to support the entire aviation sector with bailout fund in the form of soft loan of not more than five per cent interest rate.

The lump sum, which also include the operators and service providers, was in lieu of about N180b estimated to have been lost during the three months of lockdown.

Apparently fast becoming a reality, though belated, the airlines submitted applications to designated Lagos and Abuja offices, under the aegis of the Airlines Operators of Nigeria (AON).

Among the applicants that submitted are: Dornier Airlines, OAS Helicopters, Omniblu Aviation, Quorum, Allied Air, Top Brass, TAL, ANAP Jets, West Link, Jed Air, Executive Jets, Kings Airlines and First Nation Airways.

Others are Dana Air, Max Air Limited, Skyjet Aviation Services Limited, Skypower Express Airways.The documents were submitted and delivered to the coordinator, Allen Onyema, who is the Chairman of Air Peace, for onward delivery to the CBN Governor on behalf of AON.

AON Chairman, Captain Noggie Meggison, said what the airlines were asking for was grants, “the same way it is done in the United States to save many airlines from the impact of COVID-19 on the aviation industry.”

Meggison regretted that many airlines might not come back to operations because of the huge impact the deadly disease and closure of airspace had done to not only the aviation industry, but all sectors of the country’s economy.

He said:  “Aviation is a catalyst for economic growth. It is one of the sectors that should not be allowed to go under. It is a big sector like telecommunications, agriculture, and education among others. Government needs to help us. We are not talking about a palliative that the government is planning for the entire sector, but grants to assist the carriers.”

Meggison admitted that the government was equally looking for money to meet many of its obligations, but pleaded that the carriers needed assistance to surmount many challenges they currently face.

He reiterated that what the operators were asking for is totally different from government’s stimulus package that has been earmarked for settling workers’ salaries and other operational needs.

Meggison, who is also the Managing Director of Jed Air, equally lamented passengers’ apathy to air travel, stressing that many of the airlines are running at huge loss.

He said three airlines operated less than 40 passengers in their airplanes from Abuja to Lagos, describing it as not encouraging. He advised that airlines should look at operating two flights a day, to curb the losses, adding that the factors that would drive traffic were not in place yet.

However, the Secretary General of the Aviation Safety Round Table Initiative (ASRTI), Group Capt John Ojikutu (rtd), said the loan should only reach airlines that were not indebted to services providers. Ojikutu said government should direct the CBN to assess the debt portfolio of these airlines to be able to determine if any is entitled for the loan.

“Some airlines are said to owe as much as N13b. My worry is, some would get the loan or bailout the same way they collected the 2012 intervention fund without necessarily having need for it and could close shop like the Air Nigeria did, after collecting N35b at two per cent interest rate.”  (The Guardian)




Source: News Express

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