Why Airlines Won’t Get New Bailout Funds
There are indications that the Federal Government is not disposed to assisting Nigerian carriers through another round of bail out, as pressure mounts on government to do so.
Woleshadarenews learnt that the airlines under the aegis of Airline Operators of Nigeria (AON) had written many petitions to government to consider fresh bail out for them, which it has turned down with condition that they would be subjected to periodic financial audit of their books at the end of every financial year.
Another reason government is reluctant to give them money has to do with paucity of funds occasioned by the recession the country is currently going through.
To show commitment to the carriers, government had excluded them from payment of duties on aircraft and aircraft parts. This has saved the carriers enormous foreign exchange they would have spent to bring in their equipment into the country.
Just recently, Minister of State for Aviation, Hadi Sirika, secured a special sectorial allocation of forex for Airline Operators in the Secondary Market Intervention Sales (SMIS) for airline operators.
This is to further engender market confidence, ensure access to forex by the airlines and sustain the integrity of the Nigerian Inter-bank forex market.
The Central Bank of Nigeria (CBN) had resolved pursuant to the minister’s show of concern to intervene in the inter-bank forex market through forward settlement.
For clarity, the Special Secondary Market Intervention Sales (SMIS) – Retail is an important one-off exercise dedicated to the clearance of the backlog of matured forex obligation for airlines. It is expected that this is a major window for those airlines that had earlier ceased their operations to recommence in earnest.
Therefore, with this intervention comes a landmark incentive for both local and foreign operators to carry out safe, secure and lucrative operations in Nigeria.
In addition, all scheduled and mandatory checks, which are done in the diaspora, will be undertaken with this leverage at a reduced cost.
Speaking on the development, aviation security consultant, Group John Ojikutu (rtd), said there seem to be no end to airlines operators’ financial desires or wants.
His words: “Yet they remain financially insolvent and perpetually in debt to major safety services providers in the sector, including fuel marketers, insurance, aircraft spares vendors, staff salaries many months in arrears and they provide very poor services and comfort to air travellers and have very short lifespan and exit the sector silently, still in debts.”
Ojikutu alleged that Nigerian domestic private airlines operators and their politically-exposed supporters in and out of government know their ways to drawing funds from our commonwealth in government coffers for their benefits alone without considering the consequences of their actions on the overall social economic well being of Nigerians.
He stated that the present situations of these airlines and government services providers are of serious concern, adding that the situations need proper scrutiny and investigation by the National Assembly if the aviation committee members of both chambers of the House would not want to be seen as accomplices in what has now become deliberate exploitation of “our commonwealth by some few individuals’ proxy to senior government officials in the Presidency.”
Ojikutu recalled that according to official source from the CBN at one of the Senate public hearings in 2012, the intervention was not meant for the beneficiaries to re-fleet their airlines but specifically, for them to pay their debts to the banks.
This act of intervention in private businesses with public funds, according to him, was done by whosoever authority and approval without necessarily finding out the airlines debt portfolios and the natures of the debts and without the knowledge of the responsible authority in the ministry of Aviation.
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