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Airlines’ bailout: Govt awaits 10-man committee report

By   Kenneth Ehigiator
The federal is currently awaiting reports of the 10-man committee set up on palliatives for airline operators in the country to know what specific relief package to be put in place for the airlines.

Senior Special Assistant to the president on Aviation, Capt. Shehu Usman Iyal, who disclosed this at the 18th Annual African Aviation Conference in Abuja Tuesday, said the committee, chaired by the chief executive officer of Overland Airways, Capt. Edward Boyo, is expected to identify areas government could bailout the airlines.

He said government’s commitment to bailing out the airlines was accentuated by the fact that the palliatives had been built into next year’s budget, but said only the committee could state wnat direction the palliative measures would take.

Capt. Iyal said: “For operators in Nigeria, the good news is that President Umaru Musa Yar’Adua, who is deeply concerned about their plight, is already wading in.

“I truly do not know right now the mode the federal government’s intervention is going to take since the meetings with the operators are still on_going.

“But while awaiting the outcome of the meetings, our dear President has given indication that this government is ready to come to the aid of operators. It is my belief that the planned palliative package will be included in the 2010 budget.”

He said the federal government would soon convene a meeting of parastatals in the aviation sector to also work out a relief for airlines, especially as the operators have complained of arbitrary charges, raging from landing, parking to navigational charges.

Iyal said, though the airlines were owing parastatals debts in excess of N10 billion arising from charges, it was government’s thinking that the airlines should not be chased out of existence in efforts to recover the debts by the agencies.

“Make no mistake about it; we have now glaringly ascertained that operators in Nigeria are yoked by debilitating debt and the inability to meet the rising cost of doing business. Operators are in particular complaining about the litany of charges at our airports.

“These charges, they told us, include landing and parking charges, fuel surcharge by the Federal Airports Authority of Nigeria (FAAN) and high cost of aviation fuel.

They also disclosed that the Nigeria Airspace Management Agency (NAMA) has introduced terminal and navigational charges, which is the payment for the use of navigational aids at the airports by the airlines.
“It is reckoned that operators in Nigeria owe aviation regulatory agencies and such other service providers more than N10 Billion. If we add debts owed banks, both in Nigeria and abroad, we may well be looking at a debt burden on our local operators that runs into several millions of dollars.
“They also complained about the huge amounts of money in foreign exchange for the maintenance of aircraft and purchase of aircraft spare parts, which can only be imported into the country.
“The operators also lamented the withdrawal of duty waiver on aircraft parts importation and complained about double taxation on aircraft parts (Customs Duties and Value Added Tax) which they said have a huge toll on airlines’ finances.

The plight of operators in Nigeria has not been helped by low patronage which is a direct effect of the global economic melt down,” Iyal said.
He noted that government’s dream of building the Nnamdi Azikiwe International Airport in Abuja into a hub would not be realised if domestic airlines were not assisted to grow.

File: FG, 4/11/2009.


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