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Coronavirus: How FG can help domestic airlines stay afloat

 

Multiple flights have been cancelled or temporarily suspended across Nigeria as airlines struggle to cope with falling demand following the spread of coronavirus. No doubt, airlines are the worse hit during this period as passengers’ restrictions has made several airlines across the world close shop indefinitely.

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With 15 million estimated passengers who travel through the Nigerian airports annually, the loses for Nigerian airlines may be in millions of dollars pending when the crisis is over.

For instance, before the ban on international flights into Murtala Muhammed International Airport (MMIA), Lagos and Nnamdi Azikiwe International Airport Abuja, Air Peace, the largest Nigerian carrier downsized its operations and Arik Air announced the temporary suspension of flights to all its West Coast destinations in response to the adverse effects of the pandemic, Coronavirus.

However, with the ban on all international flights into the country on Monday, Air Peace has had to suspend all of its international routes and operations which include Dakar-Senegal, Monrovia-Liberia, Freetown-Sierra Leone, Banjul-Gambia, Ghana-Accra and Sharjah-Dubai routes.

The Nigeria Civil Aviation Authority, (NCAA), stated that the closure of international flight operations at the Lagos and Abuja airports is in addition to the three other international airports in Kano, Enugu and Port Harcourt shut for flight operations on Saturday.

According to the statement, the closure would last till April 23, but the Lagos and Abuja airports will be opened to emergency and essential flights within the period.

While the closure lasts, the airline will be forced to park over half of its fleet, while it will be required to pay for costs accumulated on its leased aircraft, payment of allowances for crew, parking fees and maintenance fees without making any return on the aircraft while on ground.

Experts have therefore said if the airlines are not in any way supported by way of tax evasions, interest free loans and evasion of charges, many airlines may go under after the epidemic.

Supporting airlines to stay afloat

Ikechi Uko, a travel expert and consultant, told BusinessDay what government can do to support airlines during this crisis and after the crisis are to waive all government taxes and charges as contribution savings to running cost.

Uko said this way, no fake airline will collect cash subvention like they did the last time

Olumide Ohunayo, an aviation analyst, hinted that the Russians, USA, Canada, Britain and some other countries have come up with one measure of support or another for the airlines, adding that Nigeria will not be at default if it looks at options of supporting the aviation industry to kick back the economy after the coronavirus crisis.

“There are so many options before the government in helping support the airline. It is either they give direct financial incentives to the aviation industry or they give loans to organisations to get back up again.

“Another option could be approving corporate bonds through the Central Bank of Nigeria, (CBN), tax waivers could also help and waiving some charges to ensure airlines get back on their feet. What we have before us is not a matter of liquidation but insolvency and disappearance of organisations. These options are what we should take to save the airlines,” Ohunayo added.

For John Ojikutu, aviation security consultant and Secretary General of the Aviation Safety Round Table Initiative (ASRTI), as the government and the international airlines are closing shops into the international airports, government can support the domestic airlines by giving them free service charges to some airports that can be classified as category D.

Ojikutu also suggested that federal government should reduce the service charges of others classified as categories A, B and C by 25 percent, 50 percent and 75 percent respectively on landing, parking and navigational changes depending on the annual passengers and air traffic.

Justifications for FG and CBN’s support

In March 16, 2020, the CBN issued a statement acknowledging the adverse impact of the virus on the global and Nigerian economies and announced a moratorium of one year on all principal repayments of intervention loans effective March 1, 2020; reduced interest rates from 9 to 5 percent per annum for one year; and created a N50 billion targeted credit facility to cushion the impact of the virus on businesses.

Experts in the aviation industry has commended the move by the CBN and are suggesting that other aviation agencies should take a cue from the CBN and look for ways to help airlines cushion effect of the situation.

Olumide Ohunayo, told BusinessDay that in the past the industry have been plagued with one crisis or the other ranging from the September 11 attack, SARS outbreak, the financial crisis and now, the coronavirus.

Ohunayo hinted that for now, the airline looks like the most hit of all but in the long run, Nigeria will find out that economy is worse-of.

“However for the government to restore the economy, we will be competing with other sectors for government support and subvention. Although it is a health problem but it is hitting the airlines.

“The fact that the airlines ensure connectivity, ensures the economy moves, brings in passengers and the passengers come in with cargoes that are used to build the economy and bring in tourists and investors that supply dollars that are used in the industry, there is a need to prioritise the aviation industry as part of the beneficiaries for whatever palliatives that will be chosen by the federal government,” he explained.  

He however noted that whatever measures that will be taken must be done proportionately using each airline’s size of fleet, size of operations and schedule to see how the crisis affects individual schedules and operations. “This should be the basis of appropriating any kind of support to the airlines,” Ohunayo said.

Ikechi Uko said the justification for the intervention fund by CBN for the airlines is that without mobility, the nation will grind to a halt but it is in everyone interest that the wheels keep rolling as the nation combats the pandemic.

Airline operators suggests palliative measures

Nogie Meggison, chairman of Airline Operators of Nigeria, (AON) has suggested that the agencies should help the airlines by immediately streamlining the over 32 multiple charges given to airlines which are mostly double billing.

Meggison said the government should also bear 100 percent cost of disinfecting all aircraft for this period and provide thermal scanners and hand sanitizers as well as mobilize more manpower and training of Port Health Personnel at our local airports to encourage more people to travel.

“What we are asking for is not unprecedented. For instance, in the United Stated of America, airlines are seeking a $50 billion bailout. As part of its response, an Emergency Stimulus Package was passed by the US Senate and House and they reduced interest rates to 0.25 percent. Also, the bill granted their airlines tax credit for their losses during the Pandemic.

“Our government can do the same therefore by granting the above stated reliefs to Nigerian airlines as a way of assisting them during this very difficult time to recover from their losses,” he said.

Air Peace deploys measures to protect passengers  

Since the outbreak of Coronavirus, Air Peace, has put in measures for protecting its numerous passengers and staff against the spread of Coronavirus.

On Friday last week, a Nigerian passenger who was billed to travel from Lagos to Asaba on Air Peace flight on Friday was stopped and isolated by the airline’s Coronavirus screening team when they discovered that he was very sick.

Informed source close to the airline disclosed that the passenger was supposed to travel on Monday but deferred his flight to Friday probably because he was too sick to travel.

Air Peace had earlier deployed personnel at every airport it operates to check passengers’ temperature and subject them to hand sanitization and anyone with high temperature was referred to Port Health.

 It was when the temperature of this passenger was being checked that the airline personnel discovered that he was very sick and the temperature was very high.

The airline isolated him immediately and notified the Nigerian Civil Aviation Authority (NCAA), the Federal Airports Authority of Nigeria (FAAN) and the Port Health.

Godfrey Ogbogu, the airline’s Safety Manager, stated that all passengers of Air Peace are being subjected to a thorough hand sanitisation at the boarding gate, adding that the airline introduc

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