Domestic airlines seek urgent bailout to stay afloat
By Louis Iba
INVESTORS in Nigeria’s domestic airline business are seeking a direct Federal Government financial bailout to salvage the industry from imminent collapse.
Chairman of the Airline Operators of Nigeria (AON), Capt. Nogie Meggison, in a statement at the weekend, said the industry had sunk into its worst form of financial woes and that only the government could rally round the rest of the stakeholders in the aviation sector to provide the life-line to keep the airline industry alive.
“We therefore call on the Federal Government to, as a matter of urgency, come up with a strategy to bring all parties to the negotiating table to seek, for the first time, direct intervention funding to air lines in the interest of saving the aviation system from collapse , considering that without the airlines, there is no aviation,” said Meggison.
“It must also be put on record that Nigerian airlines create about 90 per cent of the full time employment in our aviation sector today, both locally and internationally, and we remain a pivot to the Nigerian economy and one of the main catalysts to economic recovery and national progress through the critical services we provide daily,” the AON boss added.
Meggison said in the last 30 years the domestic airline industry had never received any form of financial assistance from the Federal Government, pointing out that contrary to widely-held opinion, no airline benefited from the Aviation Intervention Fund of 2011.
“I have to state unequivocally that domestic airlines in the country did not and have not received any form of funding from the Federal Government in the past 30 years since the deregulation in 1983, contrary to widely held beliefs, opinions and publications in recent past that they were given an intervention fund by the Federal Government,” said Meggison.
“Contrary to what most people in the public think, the airlines never received any direct fund from the Federal Government intervention. Rather, what happened was that the funds released went to the banks in an effort to keep them afloat for bad debts owed to banks by airlines during the period of economic recession of 2011.
“Airlines in Nigeria are grossly over burdened by the numerous charges from government agencies, taxes, overheads, epileptic and excessively priced aviation fuel of N200 per litre, unavailability of forex that they have to grapple with on regular basis to meet repairs and maintenance costs, purchase of spare parts and excessive bank loan interest of 26 per cent, as well as training of pilots and other technical personnel abroad on regular basis.
“It is very sad to note that despite all these numerous burdens on the shoulders of Nigerian airlines, which leaves them virtually able to survive or even make ends meet; airlines are still expected by the Federal Inland Revenue Service (FIRS) to pay taxes out of their losses, making the operating cost more expensive to run an airline in Nigeria than anywhere else in the civilised world today due to multiple and excessive taxation from NCAA, FAAN and NAMA,” he added.