Aviation sector may collapse if….’

By UDEME CLEMENT

The Airline Operators of Nigeria (AON) has declared that the aviation industry in the country may go under if the Federal Government does not urgently put measures in place to create a conducive environment for local airlines to strive.

The Assistant Secretary General of AON, Alhaji Muhammed Tukur, made this known in an exclusive chat with Sunday Vanguard  in Lagos.

Tukur lamented that hostile operating environment and huge indebt are among major factors militating against the development of local airlines doing business in Nigeria.

He stressed, “At this point, we must realise that airline business is capital intensive and requires long gestation period for the business to consolidate.

This is not the type of business that optimises outputs in the short-run like buying and selling, because it requires long-term investments and enormous resources to stabilise. So, until these problems are practically addressed and lasting solutions found, local airline operators would still face problems in their operations”.

On whether the N500 billion approved by government as a bailout package for local airlines could not turn the sector around for greater productivity, he said, “the bailout package approved by government was a good initiative and a step in the right direction because it would boost their operations.  But if you carefully analyse the challenges facing local airlines in this country, you would logically conclude that the bailout alone is no solution to numerous problems facing the sector, because it would not completely alleviate the demise of the industry. It could only enhance their performance to a certain level.

“For instance, if you also look at the few airlines that are still flying, they are not financially balance at all. They are carrying heavy debt burden, which makes them not to be credit worthy.

Some of them are indebted to commercial banks, government, oil firms and other companies they transact business with on regular basis. Aside from creating enabling operating environment, local airline managers must also exhibit financial discipline in running their companies and handling funds. Company funds must be separated from personal and family businesses to enhance development”.

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