Analysts raise questions over N4bn bailout for airlines

 

 

Posted by Sade Williams

 

During the week, the Federal government made good its promise by releasing N4 billion intended to ameliorate the harsh impact of the COVID-19 pandemic on the businesses of operators in the aviation sector to it.

At the commencement of aviation activities after over three-month lockdown as a result of the whirlwind of COVID-19 pandemic, the Federal Government promised to assist the industry with N27 billion bailout palliative, to cushion the effects of the lockdown in the industry.

But a document seen showed that airlines, ground handling companies, airport car hire association, travel agencies and catering services companies all got some shares except for the Aviation agencies which only got deductions as part of debts owed them by the airlines .

The document showed that the sum of N4, 995,999,999.904 was shared among the aforementioned after 5% deductions from all airlines indebted to service providers and regulatory agencies to the tune of N203, 999,990.95.

It was revealed that scheduled operators were granted N3, 000, 000, 000 with 5% deductions for the Federal Airports Authority of Nigeria (FAAN), Nigeria Airspace Management Agency (NAMA) and Nigeria Civil Aviation Authority (NCAA).

The deductions stand at 50% for FAAN at N75, 000,000.03; NAMA 25% at N37, 500,000.01 and the NCAA also at 25 % for N37, 500,000.01 making a total deduction for scheduled operators at N150, 000,000. 05 bringing the pay accruable to the scheduled operators at N2, 849,999,999.95.

Non-scheduled operators got a total amount of N1, 000, 000, 000 with a total deduction of N950, 000, 009.10 to aviation agencies including FAAN, NAMA and NCAA getting N 24,999,995.45 at 50% for FAAN. N12, 499, 997.73 at 25% each for both NAMA and the NCAA bringing total deductions for non-scheduled to N49, 999,990.90.

Ground handling companies, Aviation fuel marketers and catering services got a total of N233, 333, 333.33 each.
The National Association of Travel Agencies (NANTA) got a total of N196, 000,000.00 with a N4, 000, 000.00 deductions while Airport Car Hire Association of Nigeria (ACHAN) received from the ministry, N100, 000,000.00 bringing the total amount to N4, 995,999,999.90.

Meanwhile stakeholders have raised questions on the stimulus package as some believe that the money is too small for airlines whose businesses were the wort hit during and after the pandemic.


Others see the money as only for jamboree because government was not specific about what it should be expended on in their various operations.

“Palliatives, bailout, rollout, intervention funds or whatever we call it is necessary. All over the world, the government is giving palliatives, bailout funds to their airlines. Even the strongest of airlines all over the world asked for this. What bothers us more in Air Peace is the retention of the workforce. COVID-19 has brought about immense loss of jobs worldwide. We must begin to think of ways of curbing the losses in Nigeria”, Chief Executive Officer of Air Peace, Allen Onyema, had said in June this year, while joining several stakeholders in the aviation sector to seek palliatives to keep airlines afloat.

According to him, ‘my paramount concern is the workforce, we have over 3, 000 staff, their livelihood is in danger, we need to do everything possible to protect jobs, we need money to pay salaries not buy airplanes”, he had said.

But when the Minister of Aviation announced that N4 billion would be released to the airlines, the Senate quickly raised an alarm that the amount was a meager one that would not be enough even for only one operator.

Chairman, Senate Committee on Aviation, Senator Smart Adeyemi, sees the bail-out fund as too small to cushion the effects the pandemic had on the operators’ businesses and requested the FG to magnanimously review it to a more reasonable amount that would be sufficient to bail the operators out.

“N4 billion is very little to solve some of the problems of the airlines, who are battling to survive. We urge the government to take charge of the sector. They need to give them more and they also need to support then in all ways.”

Commenting on the latest developments, a stakeholder noted that a beleaguered sector that was merely floating and which got hit by a ravaging pandemic, ‘cannot float properly with the meagre amount except government was planning to release the money in batches from the supposed N27 billion’.

“There is no doubt this fund would go a long way in assisting the sector to rebound, but not adequate to assuage the losses brought about by the pandemic. And what will the remaining N22 billion be used for, government has not said anything about that” , he said.

To Group Capt. John Ojikutu (Read), formet commandant of the Murtala Muhammed Airport, Lagos, as long as government was not specific on why it is giving out stimulus package to the airlines, ‘it is only for jamboree purpose and would not be accounted for’.

“I was at the National Assembly and it was agreed that money should be released to the sector but with the way government has gone about it, there will be no accountability, no direction.

“To me, this fund is for ‘Christmas Jamboree’ because government did not specify what it should be used for. Would this also go the way the first one went? Is it to help them pay salaries, it is to help them  carry out periodic maintenance on aircraft that are not flying, these are the things the airlines should have put in their plans and if they didn’t put them, government should put it in the plans before releasing this fund or how can government just release money like that without guidelines, there are still more questions to be asked” , he said.

Another stakeholder who does not want his name in print advised  airlines not to use the money on frivolitites but to pay staff salaries for the period of the lockdown, adding that ‘that was the reason many workers  were sacked or rendered redundant in 2020’.

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