Airline operators seek intervention funds at 5% interest rate

 

  •  Want waiver on taxes, levies, others for 180 days

 

 

Airline operators under the aegis of Airline Operators of Nigeria (AON) said there is need for government to begin to put in place measures that will guarantee the survival of airlines, describing the sector as the main catalyst and a pivot to the quick recovery of the Nigerian economy.

While appreciating the Central Bank of Nigeria (CBN) approval of N1.1Trillion stimulus and the recent N50b COVID19 Intervention fund to jumpstart the economy, the airlines said they would welcome immediate and simple access of the funds to aviation at an interest rate of not more than five per cent.

They however called for a proactive and immediate action by government to put certain relief measures in place to safeguard the Nigerian economy after the pandemic and ensure survival of the sector once the pandemic is over and economic activities resume.

Chairman, AON, Captain Noggie Meggison who spoke on behalf of all the operators noted that as a way forward, they suggest that government could take a cue from the American model of offering 50 per cent funding and grants, and 50 per cent palliatives through waivers and suspension of taxes, levies and fees and other charges.

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 He appealed that government should help the airlines to bounce back by authorizing the suspension of all NCAA, FAAN, and NAMA charges for domestic operations within the country for 180 days; subsidy for payment of workers’ salaries at least to cover six months from March to September 2020 so that staff are not sacked.

Others are support towards augmenting insurance premiums which are dollar denominated, as well as augmenting payment for international leases and rentals on the over 120 grounded commercial aircraft that must be paid; access to Foreign Exchange at the first tier rate given to agriculture and pilgrims.

Meggison disclosed that as a result of the COVID19, Nigeria aviation has an exposure of about 251,000 direct job losses according to the International Air Transport Association (IATA) including the various parastatals, ground handling and support  Service Providers, adding that failure of airlines will obviously bring down the support structure as well.

He equally stated that IATA projected that COVID-19 crisis would see airline passenger revenues loss by $314 billion in 2020; putting at risk 25 million jobs that are dependent on aviation globally.

According to him, “While we totally agree with the wisdom of  government to control the pandemic through the sit at home order and putting the health and life of Nigerians first, we must also recall the saying that; “While you are crying you must also see ahead.”

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Meggison reiterated that the International Monetary Fund (IMF) has projected that Nigeria’s economy will recede by three per cent in 2020; leading to the worst recession in 30 years according to the April 2020 World Economic Outlook Report recently released in Washington USA.

The lockdown, according to him, is a double blow for the Nigerian economy due to the drop in the price of oil which is the mainstay of the country to below $15, and the negative impact of the “COVID19 STAY AT HOME order that has virtually suspended all economic activities.

He expressed worry that the Nigerian economy and indeed the aviation industry requires urgent government articulation of plans if the jobs of our youths must be preserved post COVID19.

“In response to this reality therefore, it is a known fact that Governments around the world have taken the bull by the horn and taken the initiative by putting aviation in the forefront of their country’s recovery and putting in place support for the sector as a major tool to jumpstart their economy”.

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“For instance, the US Government granted a $58 billion bailout to the airline industry as well as loans and grants for airlines. Similarly, UK airlines asked for 7.5 billion Pounds; while India made available $1.6 billion rescue plan for aviation. Also, Singapore announced $112m for aviation, while Australia granted a bailout plan of AUD298m for the sector”.

“Also, the Airport Authority of Hong Kong (AAHK) put plans in place to buy 500,000 airlines’ tickets as well as buying back airport services equipment and the reduction of landing and parking fees, thus bringing the total stimulus package of the airport’s support to USD593,548,388. (HK$4.6 billion) as a way of cushioning the lull experienced by the airlines and the drastic drop in passenger traffic at the airport. This is just to mention a few as the list goes on”.

This he said calls for a proactive and immediate action by government to put certain relief measures in place to safeguard the Nigerian economy after the pandemic and ensure survival of the sector once the pandemic is over and economic activities resume.

Wole Shadare