NIGERIA:Airline Oppose Bid To Use Bailout To Establish National Carrier

Nigeria’s airline operators have kicked against the alleged plan to use part of the money projected for the bailout of the aviation industry to establish a national carrier.
They also restated their readiness for flight resumption, saying that delay in reopening of airports could make the airlines bankrupt and create a vacuum for the justification of the establishment of a national carrier.

These developments were part of the issues raised during a private webinar meeting held by the airline owners at the weekend.

A source privy to the meeting told our reporter that the airlines explained that they were working with the Nigerian Civil Aviation Authority (NCAA) for flight resumption and they have so far met over 75 per cent of requirements to restart operations.

The operators said the objective of providing palliatives to airlines and aviation agencies would not be actualised if the federal government uses the bailout to pursue the national carrier programme.

The report of the Nigeria’s Economic Stability Plan Committee, headed by the Vice President, Prof. Yemi Osinbajo, had recommended that N27 billion be set aside to support airlines and aviation agencies, which have lost huge revenue since the closure of the nation’s airspace as part of efforts to combat the spread of COVID-19.

The committee noted that the sector has lost 90 per cent of its activities and about N21 billion monthly.
According to the report, the sector therefore needed to be provided with financial support where necessary “to ensure that the sector not just survives, but also sustains air connectivity to keep passenger traffic as well as supply lines for essential and cargo flights open.”

The report also said that “it is also proposed to fast-track the establishment of a private sector-driven national carrier to generate revenues and contribute to the GDP, while creating activity in the wider economy for suppliers, importers, exporters and manufacturers.”

But the airline operators listed what the industry needs to include improved airport facilities, aircraft maintenance facility, a leasing company that can make aircraft available for the operators and availability of aviation fuel at relatively lower cost.

Speaking on the issue, the Chief Executive Officer (CEO) of Aero Contractors, Captain Ado Sanusi, told our reporter at the weekend that what should be critical now is how to ensure the survival of aviation agencies, which have not earned any revenue since the airlines have not been flying.

Sanusi added that the government should also be concerned on how to sustain the operations of the airlines so that they would not lay off workers and not to start a national carrier.

He, however, noted that he supports a national carrier but the project would need time to actualise.

“There is no sincerity of purpose in all these. You gave airlines guidelines for resumption of flights, but you continue to adjust your timeline. The Ministry and PTF (Presidential Task Force) for COVID-19 decided on June 21. No airline gave any date, but if you really want airlines to resume operations, it is expected that you lift inter-state restriction because airlines cannot operate without lifting the restriction,” Sanusi said.

He noted that the national carrier will face the same problem the existing airlines are facing if it is going to operate in the same environment, which he said is characterised by dilapidated airport infrastructure, high cost of aviation fuel, absence of local maintenance facilities and other challenges.
“If the national carrier will operate in the same environment, it will face the same challenge. I don’t see the national carrier doing better. It may have more money and support from government, but those advantages will just enable it to last a little longer before it goes under,” he stated.
The CEO of Top Brass Aviation Limited, Captain Roland Iyayi, told our reporter that he did not support the national carrier because it would not support the immediate challenges facing the aviation sector.
He said the national carrier was not key to success as many of such airlines were not doing well globally.

On bailout, Iyayi said instead of giving cash to the airlines, the federal government should make aviation fuel available at cheaper cost, give airlines 24 months tax waiver, including landing and parking charges, and use the bailout to support aviation agencies, which have not been earning revenues since airlines stopped flying.

“It will also be good if government can give airlines the money as grants with long-term, single-digit interest rate. But some airlines just wanted cash, which I disagree with. I have also disagreed with the Minister of Aviation over the plan to set up a national carrier because I know it will not solve the immediate problem of air transport in the country. The minister wants to bring in 10 aircraft from Qatar Airways; but it will still face the problem other airlines in the country are facing; unless there is no level playing field. Government needs to dismantle the fuel marketers’ cartel, which sells aviation fuel at fixed prices not determined by market forces. In that way cost of aviation fuel will become cheaper for airlines,” Iyayi said.

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