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Airlines’ yet to present blue print for planned stimulus package-NCAA

- Ex NCAA DG advocates single digit interest rate
- Air Peace seeks funds to save job losses
The Director-General of the Nigerian Civil Aviation Authority (NCAA), Capt Musa Nuhu said the country’s airlines were yet to articulate what they want to do with the stimulus package they seek from the Federal Government.
He urged them to come up with broad based plans of the utilization of the bailout fund that the Federal Government is considering to save the entire aviation sector.
At a virtual seminar, with theme, “The Challenges and Opportunities For Nigeria’s Aviation Value Chain During And Post COVID-19”, put together by Aviation Round Table (ART) and monitored by Woleshadarenews, the NCAA DG acknowledged the impact of COVID-19 pandemic on the entire aviation sector.
Other participants at the seminar included Managing Director of Nigerian Airspace Management Agency (NAMA), Captain Fola Akinkuotu, President, ART, Dr. Gabriel Olowo, PMP, AVAERO Capital Partner, Sindy Foster and Chairman, Aviation Ground Handling Association of Nigeria (AGHAN), Mr. Adigun Olaniyi
Nuhu disclosed that other beneficiaries include aviation agencies, ground handling firms and aviation related bodies.
He explained that they had made consultations with airlines, ground handling firms, adding that another round of consultation would be held very soon.
“We do not know exactly what the airlines want to do with the money they are asking for. All I hear from airlines is give us money without telling us what they want to do with the money. None of them has come up with exact thing they want to do with the money”.
“We have made consultations and we are still consulting, we have consulted with airlines, we plan to have another consultation with them and the ground handlers, we are developing a programme for an economic stimulus package, all inclusive, all the heads of agencies were recently locked up in a hotel in Abuja including the Minister to map out ways of getting stimulus for the sector. The minister presented a very good case on this with the Vice President”, he said.
Managing Director of Air Peace, Mr. Allen Onyema said the plan stimulus package from government should not be seen as free money for the airlines without accountability, adding that this is not an opportunity to buy new planes or other expensive equipment but rather to help pay workers’ salaries and cut job losses.
His words, “We look up to government to see how they can help. We are not saying give us free money, money that can’t be accounted for. We should not be going for free money. This is not the opportunity going to buy new planes or buy new equipment. My paramount concern is that I have about 3, 000 people working for Air Peace. That is my worry. I don’t worry about profit but about job creation. Look at the value chain. We must take job retention seriously. I will not ask airlines to tell government to give them money to buy planes but to pay salaries”.
“Every airline should think out of the box in how to make flying safe. I don’t want to support the middle seat empty saying it won’t make much difference but add to airline losses. I am calling for proper sanitization. Make sure you don’t distribute plated food. Nigerian should not join the bandwagon on leaving out middle seat. We need the support of insurance company, government to assist the airline”, he added.
Onyema may have taken the position of accountability for the planned bailout funds because of how the over N120 billion funds given to carriers in 2011 were mismanaged.
Air Nigeria, re-christened from Virgin Nigeria, was the highest beneficiary, receiving N35.5 billion, which was supposed to be monitored by the Central Bank of Nigeria (CBN), as well as the Bank of Industry (BoI).
Other airlines that benefited included Aero, which received N20 billion, Arik Air got N15 billion, Kabo Air got N6.66 billion, IRS and Chanchangi Airlines got N3.4 billion each.
Some of the least beneficiaries included Dana Air, which accessed N618 million, Caverton Helicopters got N1.348 billion, Overland Airways got N805 million and First Nation Airways got N271.7 million.
Ten airlines benefitted from the fund through loans with a tenure of 10 to 15 years. The beneficiaries were Arik, Aero, Air Nigeria, Chanchangi Airline, Odengene, Dana, Overland, IRS, Kabo among others.
Chanchangi, Odengene, Air Nigeria and IRS have folded up with tax payers’ money gone down the drain. The loans were not collateralized. Arik, Dana, Aero, Kabo, Overland are ones still in operation.
Former Director-General of NCAA, Dr. Harold Demuren said the only way for the country’s airline to survive is to reduce interest rates on loans, saying double digit interest would sink an industry that is already at the verge of collapse.
He stated that single interest rate is more beneficial to the airline industry than the much touted palliative.
According to him, “Your investment is already destroyed if you borrow at 25 per cent. I think that is what we should be telling government”.
Accountable Officer for Dana Air, Mr. Obi Mbanuzo called for cooperation among airlines through code-share and interlining, but admitted that merger cannot be forced.
He noted that cooperation rather than competing against each other would save the sector from COVID-19 induced problems.