Airline operators ask FG for special intervention fund

Airline operators in Nigeria have cried out to the Federal Government to bail them out of imminent collapse from business by granting them Special Intervention Fund to remain afloat.
The operators made the demand Wednesday at an emergency interactive session with the Senate Committee on Aviation.
Speaking on behalf of the operators under the aegis of Airline Operators Association of Nigeria, the CEO of Arik Airline, Chris Ndulue, said the economic environment they operate in had moved from bad to worse.
“The economic situation as it is today is suffocating us out of operation,” he said.
According to Ndulue, apart from Aero Contractors and one other presently under distress, two other airlines may follow if the government in form of Special Intervention Fund does not make urgent intervention directly to the aviation sector.
He listed high interest rate of 24 percent on bank loans, worsening exchange rate of naira to dollar and multiple charges from regulatory agencies as problems running them out of operations.
“There are a lot of economic indicators that have made business more difficult, which are now manifesting in the ability of the airlines to continue to operate. We are operating in an industry that has very little (profit) margin.
“For a start, if you have to borrow money and you have to pay 24 percent, and you don’t make a margin of 24 percent, it means that you will find it very difficult pay back the debt. And there is a limit to what you can do in terms of being able to manage the debt. These fundamentals are the things we need to address,” he said.
He asked the Committee to collaborate with the Federal Government in working out plans of rescuing Aero Contractors, saying allowing the airline to get out of operation completely would serve as bad signal to others, having being in business five decades.
The director-general, Nigerian Civil Aviation Authority (NCAA), Muktar Usman, however assured the Committee that the Federal Government was already taking steps to remedy the situation. Aside Arik, CEOs of Aero Contractors and FirstNation Airlines were also at the emergency session.

 

OWEDE AGBAJILEKE, Abuja