Aviation run risk of collapse, NUATE cries out
- Seeks bail to save sector
Aviation workers have pleaded with the Federal Government to come to the urgent intervention of the sector to prevent a total collapse of a sector they said is worst hit by deadly COVID-19 pandemic.
The workers represented by the National Union of Air Transport Employees (NUATE), an affiliate of Nigeria Labour Congress (NLC) said many of the airlines were on life support before the advent of COVID-19, stressing that many of the logistics and other allied companies, such as in-flight catering, flight support services, fuel supplies, etc, were equally at the verge of winding up.
The Secretary General of NUATE, Ocheme Aba lamented the precarious situation the Federal Airports Authority of Nigeria (FAAN) had found itself.
The authority he reiterated had been grappling with the heavy burden of maintaining 23 airports across Nigeria of which only two are viable; a responsibility he stated is impossible to shirk due to the social-economic importance of maintaining all the airports.
Aba further stated that under these circumstances, the pandemic-imposed shutdown cannot but be seen as a killer punch against aviation, to the extent that aviation in Nigeria runs a very high risk of total collapse without urgent and substantial intervention, or bailout, from the Federal Government.
He admitted that the situation currently faced by aviation is global, which he noted only heightened in Nigeria by historic factors.
His words, “Based on empirical findings which support the crisis facing aviation organisations, various global institutions such as the International Civil Aviation Organisation (ICAO), the International Air Transport Association (IATA), and even the International Labour Organisation (ILO) have all called on governments of all countries to render significant support to their aviation companies to cushion the losses in revenue occasioned by the pandemic”.
“The United States of America, several European countries, including the United Kingdom, have already announced generous bailout packages for their aviation companies in response to the emergency. These responses signpost the fact that there will be dire consequences should lethargy and indecision hold Nigeria back from towing this global trend”.
It is for the purpose of mitigating the foregoing dire concerns; he stated that NUATE makes an appeal to elicit Congress’ strong support and positive and urgent actions to prevail on Federal Government to hasten its steps towards releasing a bailout package for the aviation sector in Nigeria.
He however advised that the Federal Government should apply methodology that would ensure the mistake of the past is not repeated where airlines could not account for previous aviation intervention that ran into several billions of Naira, saying, “It must not be business as usual”.
“For, there had been two previous such financial interventions in the aviation sector in recent memory, both of which left much to be desired. In those instances, airlines like Arik Air, Kabo Air (defunct), Air Nigeria (defunct), and many others collected billions of Naira supposedly for capital injection into their businesses, but were diverted to personal usages, and callously leaving the airlines to bleed to death”.
“The promoters of these airlines then ran away with bloated personal bank accounts and they are walking free till today. This was possible because the airlines were individually owned enterprises without any discernable corporate governance structures.
“Unfortunately, this particular situation of the airlines, in terms of their ownership and governance structures remains largely unchanged today. Therefore, if the same methodology as before were to be used, then we fear that the same undesirable result will accrue. This will be most unhelpful”, he added.
The interventions, whatever form they may take, he reiterated should mimic the extent of losses incurred by each and every organisation, public or private, and should vary proportionately.
He equally advised that cash grants should be extremely minimised, or even totally avoided, adding that in other words, little or no monies should be paid directly to the companies or agencies.
“Rather, debts and other outstanding obligations which constitute overhangs should be carefully determined and paid directly from the intervention fund. Such obligations could include outstanding staff emoluments, operational fees to FAAN and the other agencies, remittances (PenCom, taxes, etc), outstanding scheduled mandatory aircraft maintenance costs, and such other outstanding debits”.
He noted that there has to be clear conditionality for access to the intervention fund, such as, discernable good corporate governance structure, transparent and accountable process for monitoring implementation of the intervention policies, industrial climate, especially the presence of freedom for employees to freely join trade unions of their choosing, as well as presence of validly negotiated Conditions of Service, accountability for previous interventions where applicable, and such other conditions that may be deemed fit.
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