Chidiebere Nwobodo
That COVID-19 pandemic pummeled Nigeria’s aviation industry is no longer a subject of argument or analysis, but the impact of its devastating effects that will take long time and resources to erase. A beleaguered sector that was merely floating, got hit by a ravaging storm of pandemic, albeit unprepared, and caught some of the airlines hemorrhaging, and teetering on the brink.
At the restart of aviation activities, after a three-month hiatus orchestrated by the whirlwind of COVID-19 pandemic, the Federal Government promised to assist the industry with N27 billion bailout palliative, to cushion the effects of the lockdown in the industry. Some airlines, have been limping since life came back to the sector after the shutdown in the hope that the proposed bailout would provide much needed lifeline for them.
Some airlines resisted the pressure to slash salaries and downsize workforce, in order to cut costs—in view of the proposed bailout. But the recent news in some section of the media that Federal Government “withdrew” the N27 billion bailout, if confirmed to be true, will sign the death warrant of thousands of jobs and herald litany of sufferings for the aviation workers in particular, and the economy in general. The insinuations alone in the media has begun creating panic and anxiety in the industry. Investors’ confidence is being eroded.
Air Peace, the nation’s largest indigenous airline with over 45 per cent control of passenger traffic and aviation workforce, recently sacked some of its staff members—75 of them were its pilots. The fastest growing indigenous airline in sub-saharan Africa, also cut salaries of its retained workers by 40 per cent. All these painful but inevitable decisions, according to the company, were made out of necessity to keep the Airline afloat in the face of economic turbulence created by COVID-19.
Before COVID-19 ship docked in Nigerian shores, the nation’s aviation industry had been contending with mountainous and prevailing challenges that have made the aviation sector unfriendly, strangulating and generally unsupportive, especially for indigenous investors. Issues of high cost of aviation fuel; multiple charges on the tickets, inability to access loans, multiple designations for foreign airlines, lack of maintenance facility, extreme difficulties in leasing planes, poor airports infrastructure, politics of landing permits in other countries, etcetera.
The drastic nosedive of passenger traffic in the airspace due to COVID-19 outbreak made already bad situation worse—it is totally complicated. Thousands of jobs and billion dollars of investments are on the chopping board. My instinct told me that Air Peace and other airlines wouldn’t have begun shedding workers off their payroll, if the hitherto proposed N27 billion bailout was made to scale through. Some of the airlines waited for government insinuated lifeline cum palliative to no avail.
The airlines are now left with only one option of survival—reduction of workforce. Bristow Helicopters, has followed the footstep of Air Peace by firing over 100 pilots and engineers. Aviation industry is bleeding profusely. Government should be rest assured that many airlines and associated companies in the aviation industry will sink if left in the cold to swim on their own without bailout. The attendant consequences of massive job loss and its intending crippling effects on the economy are propelling the economy to the point of precipice.
Thousands of more jobs in the sector will still be lost if government does not intervene via a bailout. Air Peace is just a metaphor—the yardstick to measure the health of the aviation industry because of its huge influence in the sector. The airlines are in dire sheer stress and strain. Bailout is needed to save the sector at an auspicious time like this.
Even in other climes, different governments of countries have given rescue packages for their ailing aviation industries through bailout, tax reliefs, waivers, etcetera. For example, in United Kingdom: British Airways, EasyJet, Ryanair and Wizz Air, have taken £1.8 billion pounds worth of bailout fund from the palliatives provided by the British government. European largest airline, German’s Lufthansa, got $10 billion as bailout loan from German Government, etcetera. All in a bid to protect these airlines from the grave shock of COVID-19 pandemic.
U.S government was not left out. American Treasury Department also granted $25 billion to top four airlines in the United States to help cushion the harsh realities of months of lockdown. And these are countries whose economies are way better than ours—in terms of unemployment ratio and the easy of doing business. The world biggest aircraft manufacturer, Boeing, was also assisted by the U.S Treasury Department. I think Nigeria’s indigenous airlines deserve similar support, according to their share of the industry.
Shoprite, the biggest retailing company in Nigeria, has announced its intention to pull out of the country. This is bad news for the nation’s economy. Thousands of workers are already depressed by the news, because their aspirations are on the edge. If you juxtapose financial crisis in the aviation industry with the recent negative news that emanated from the biggest foreign retailer – Shoprite – in the country, coupled with the fact that ours is an import-dependent economy that is rooted in air transportation, the picture becomes scary.
Federal Government should see bailing out of the aviation industry as a matter of national emergence cum necessity. It is true that these are private businesses, but the general well being of the economy and the stability of the polity depend on their survival. Humans and goods must keep moving for economy to recover from the effects of this pandemic. And aviation industry is strategic to that movement. A nation with over double digit unemployment figures; poor GDP growth rate, cannot watch more of its skilled workers lose their jobs. CBN should come to the rescue.
My candid opinion is that the Federal Government should not see this bailout for aviation as a “favour”; after all it is a loan that will be repaid. Rather, it should be viewed from the objective prism of patriotic intervention to save one of the critical sectors of the economy from bankruptcy and redundancy. The multiplier effects of continuous sack of pilots and other skilled workers in the industry should be considered by government. These workers have families and other dependants.
Other nations are salvaging their aviation industries through bailouts to keep them above the economic storm instigated by COVID-19 crisis. Withdrawing already proposed N27 billion bailout for the industry, will further escalate the strained situation. I wish the information is a mere rumour, and not true. I am aware of paucity of funds in government coffers, but N27 billion is not “too much” of a sacrifice from the government to save few of remaining airlines from going under.
• Nwobodo writes from Abuja