Medview agrees to sell two airplanes to pay off debt, directors resign

 

The COVID-19 pandemic may have found expression in the tough situation Nigerian airlines are currently faced with as the board of Medview Airline has agreed to sell two aircraft to pay offset its debt.

In a notice published on the website of the Nigerian Stock Exchange (NSE), the company said the decision was reached at a Zoom board meeting that held on Thursday.

In an earlier notice, the board said it would meet to deliberate on the effect of the COVID-19 pandemic on the operations of airlines in the aviation sector and the financial status of the company.

According to the statement, the aircraft to be sold are B737-400 5N-MAA aeroplane in Estonia and the B737-400 5N-MAA aircraft in Lagos.

It said the sale would help it “liquidate part of its indebtedness and inject part of the funds into its operations so as to jump-start it again after the COVID-19 pandemic total lock-down”.

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It also said the management approved the return of a leased aircraft engine with engine number CFM56-3C1 ESN 857871 to Aeolus, the lessor, so as to obviate the payment of additional rent.

The resignation of two directors, Ayodeji Ariyo Gbeleyi and Olabode Kacheef Oyedele, were also accepted at the meeting.

The aviation industry has been severely affected by the COVID-19 pandemic.

Although domestic flight operations have resumed in some parts of the country, only eight airlines are back in the sky.

They are Aero Contractors, Air Peace, Arik Air, Azman Air, Dana Airlines, Ibom Air, Max Air and Overland Airways Limited.

The COVID-19 pandemic has taken a toll on all sectors of the economy.

The Nigerian government had on March 23 shut all international airports in the country for an initial period of one month. Local airports were also shut days later.

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The move was part of efforts to contain the spread of the virus which has affected over three million people worldwide and killed over 270,000.

However, the government said emergency and essential flights could be operated from any of the airports within the period.

The minister of Aviation, Hadi Sirika recently said statistics from the International Airline Transport Association (IATA) on COVID-19’s economic impact on Nigeria revealed a revenue loss of $994 million.

“Also the figures from the International Airline Transport Association (AITA) Economics gave economic impact in Africa’s largest aviation market and that for Nigeria; airline revenue loss is $994 million. In terms of employment at risk in Nigeria, it is 125,370 and loss of contribution to the GDP is $885 million”, he said.

He said the huge loss was associated with lack of activities at the sector whose income solely depends on flight operations.

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“In civil aviation, we are in a very difficult moment like everyone else. All of these things started because someone travelled and unfortunately came back home with it (ailment) and the consequence is what we have been going through.

“We are the worst-hit than any other sector. Based on the trend of events before COVID-19, the total loss is about N21 billion approximately plus about N3 billion tangentially and this is divided in this form: N7 billion for aviation agencies which they lose in a month, N10 billion for airline and N4 billion for ground handling, catering and others and the tangential N3 billion,” he added.

 

Wole Shadare