 |
President Muhammadu Buhari
|
The Buhari administration may be considering merging all
debtor airlines in the country into a national carrier, capable of serving the
West and Central African regions, with Nigeria as the regional aviation hub.
That is part of the
recommendations by the Ahmed Joda transition committee, which submitted its
report to President Muhammadu Buhari about two weeks ago. Volumes of the report
were exclusively obtained by PREMIUM TIMES. Six of Nigeria’s leading
domestic airlines are currently bogged down by huge debts totalling almost N130
billion, forcing them to turn to the Asset Management Corporation of Nigeria
(AMCON) for a lifeline. In 2014, the Federal
Ministry of Aviation gave the debt portfolio of five of the airlines with AMCON
at over N190 billion. The amount excluded sundry debts to aviation agencies
like the Federal Airports Authority of Nigeria (FAAN), the Nigerian Airspace
Management Agency (NAMA), suppliers and other institutions.
PREMIUM TIMES report continues:
The ministry said it
arrived at the huge figure after a comprehensive audit of the operations of all
the domestic airlines.
Details of the audit
findings, the Ministry said, showed Aero Contractors’ debt stood at over US$200
mn (N308 bn), with 60% of its equity already taken over by AMCON, while Arik
Air has been in debt to the tune of over US$600 mn (N924 bn); IRS Airlines, US$55
mn (N84 bn); Chanchangi Airlines, US$55 mn (N84 bn), and the now bankrupt Air
Nigeria owing about US$225.8 mn (N347.7 bn).
In 2012, Arik, Aero, IRS,
Bellview, Chanchangi, Afrijet, Albarka, Caverton, Continental, Air Nigeria and
Savannah, were at the verge of going under when AMCON waded in with a N132 billion
lifeline, saving in the process over 7,000 staff from being thrown into the
labour market.
Aviation industry experts
told PREMIUM TIMES at the weekend that some of the airlines that were still
grappling with working capital challenges recently approached AMCON again with
a multi-billion request for a bailout to enable them settle accumulated aviation
fuel bills to oil marketers.
The Joda committee
advised President Buhari to consider a public-private partnership (PPP)
arrangement that would involve all airlines currently with AMCON, as part of
the Federal Government’s contribution to a national carrier project.
The committee recommended
the decision be carried out in six months.
The committee said this
will increase government revenue from the sector, reduce capital flight, expand
the local aviation industry and create more employment opportunities to the
people.
The Infrastructure
Concession Regulatory Commission (ICRC), the report said, should work with the
Ministries of Aviation, Finance, Industry, Trade and Investment to implement an
aviation-focused PPP framework that would create the environment for the
development of aviation infrastructure, procurement and upgrade.
The committee, which
noted poor utilization as one of the key challenges in the sector, said about
75 percent of passenger traffic were generated from three airports – Lagos,
Port Harcourt and Abuja, while over 90 percent of the revenue earned came from
Lagos and Abuja.
To ensure a realistic
capital base for domestic and international airlines for sustainability in
accordance with global best practices, the committee said the Nigerian Civil
Aviation Authority (NCAA) should in the next three months consider the upward
review of capital requirements for airlines to N2.5 bn (domestic) and N
5billion (International).
Within the target period,
the government would undertake the immediate repairs and upgrade of passenger
facilities, including air-conditioning systems, luggage conveyor belts,
passenger tunnels, to improve customer experience, increase revenue, and
improve the safety of travelers, it said
No comments:
Post a Comment