IFEOMA OKEKE
Nigerian airline operators have questioned the veracity of the N516 billion debts, which the Minister of State, Aviation, Hadi Sirika alleged that the carriers owe aviation agencies and other companies in the country.
Hadi Sirika, minister of State for Aviation, who spoke to journalists on Thursday last week at the Murtala Muhammed International Airport (MMIA) Lagos, said the Nigerian airlines are ridden with debt, describing them as weak and unable to compete and take advantage of the liberalisation of African airspace, known as the Single Africa Air Transport Market (SAATM).
The Executive Chairman of the Airline Operators of Nigeria (AO Nogie Meggison, accused the Minister of reeling out figures offhand, insisting that he cannot prove any of the debts he mentioned and noted that the aviation agencies lack the ability to transparently record their revenues and document accurately the debts owed them by the airlines.
“We have always asked them to list the debts. It is easy to call numbers. Let those we owe bring their bills and explain the debts. Although government cannot be held responsible for the operation of privately owned airlines, the Asset Management Corporation of Nigeria (AMCON) is competing with airlines, running two airlines with tax payers’ funds. So we don’t have a level playing ground because AMCON is a competitor, using the taxes we pay to compete with us. When are they going to leave the airline industry?”
The domestic carriers also remarked that debt accrual in the aviation industry is a given because airline operation is a continuum, so as long as airlines render services they incur debts from service providers, which are normally settled.
“Talking about debts, airline business is not a cash business, you accrue the charges, you are presented a bill and you pay. There is no airline in this world that does not owe,” Meggison said.
On SAATM the AON Executive Chairman said that for the new policy to work, the Africa Civil Aviation Commission (AFCAC) should provide a level playing field because every member country should charge the same amount from one country to another. In Nigeria, an airline borrows money at 24 percent interest rate, pays five percent to the Nigerian Civil Aviation Authority (NCAA), and another five per cent VAT but these are waived by government in other countries, for their own airlines.
Anietie Okon, former Vice-Chairman of Arik Air, said that the airlines do not owe that much and if they are not doing well, as alleged by the Minister, it is his responsibility and that of the government to ensure that airlines improve their operations.
Okon said the Minister should be able to calculate the value of the assets of an airline and calculate the percentage of debts to the airline before saying that an airline went under, when there was a preconceived plan to take over an airline.
“If the total debts of an airline are just 10 percent of its assets, how can you say that the company is insolvent?
Okon said that because of the critical role airlines play in the economy of every nation, conscientious governments give support to airlines, whether government or privately owned.
He recalled that at a certain point, airlines like Jet Airways of India, Kenya Airways, South Africa Airways and even recently, Emirates had financial challenges and that they were buoyed by their governments to sustain their operations.
“If all airlines in Nigeria are not doing well, what is the Minister doing about it? You know that the airlines are subjected to multiple taxation; you know that airlines cannot fly to over 18 airports in the country after 6:00 pm because there is no facilities and you are saying that government is not responsible for most of the problems of the airlines.
“We took the trouble to invest and you keep on bandying figures, possibly to amuse youself because you don’t know that your management style is crumbling people’s investment,” Okon said.
