Domestic airlines eye fresh govt bailout


By Louis Iba

DESPITE mounting domestic debt obligations to banks and the Assets Management Corporation of Nigeria (AMCON), domestic airlines in the country are now prospecting fresh package of incentives from the Federal Government to help them weather the harsh storms and remain in business.

The operators, now largely mired in serious financial crisis arising from huge debt service obligations and declining profit margins believe such intervention would help them resolve pressing operational and financial challenges threatening the aviation sector’s existence over the past four years.

As at the time of this report, debts profile of all the domestic airlines to banks and agencies, like Nigerian Air Space Management Agency (NAMA), Federal Airports Authority of Nigeria (FAAN) and Nigerian Civil Aviation Authority (NCAA) has risen to over N50 billion with one of the leading airlines believed to be owing FAAN an estimated N22 billion.

Airline operators, however, blame most of their predicament on multiple taxations by the various regulatory and service provider establishments at the airports, high cost of aviation fuel and premiums paid to insurance firms among others.

“For an industry that continues to render very critical transportation services and creates massive employment for citizens, operators say they are left with no option than to seek government assistance. A bail out programme has become inevitable. We can’t just shout it

down,” added a spokesperson of one of the airlines who wouldn’t want to be named. It is a view supported by most of the operators. Talks between airline operators and the government, it was learnt has commenced on how to salvage the domestic airline industry from an imminent collapse.

“Most airlines certainly need the Federal Government intervention, “ said Jacky Hathiramani, MD/ CEO of Dana Airlines.

“Airlines need to be motivated to perform long-term for the good of the country and to entice more travellers to go by air instead of road, as well as to stimulate commerce and tourism within the country too,” he added.

Although AMCON is currently managing the affairs of some of the airlines, Allen Onyema, Chairman of Air Peace said the new government of Muhammadu Buhari should step in and design a fresh package of incentives for struggling domestic airline operators.

Source : SunOnline

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