COVID-19: Stakeholders plead for aviation industry bailouts.

Stakeholders in the aviation sector have called for government’s urgent support to prevent complete collapse of the industry, amid the COVID-19 pandemic.

They made the plea at the AELEX Aviation Webinar II, tagged “Flying into Turbulent Skies, Safely Navigating COVID-19 Headwinds – Survival Strategies for Nigerian Aviation’’ on Wednesday in Lagos.

Mr Chris Aligbe, an industry consultant and CEO of Belujane Konsult, urged government to assist the industry through bailout to bounce back.

Aligbe said that the interjectory for the industry to get up for business lies in government intervention.

He urged the government, through the Central Bank of Nigeria (CBN), to make soft funding facility available to airlines through its stimulants package at three to four per cent interest rates and spread over two years repayment moratorium.

According to him, government should make fund available for the airline so that business can pick up at the post-COVID-19 economy plans.

“Our airports need to be privatised or concessionaire to meet up the global standard.

“Infrastructural development of the industry is also key and government should fast track the growth of the industry through effective reengineering to attract investment,’’ he said.

Aminu Ismail, Executive Director, Asset Management Corporation of Nigeria (AMCON) said that between 2012 and 2020, the corporation had injected over N50 billion into the aviation industry to stabilise airline operations.

Ismail said that AMCON’s intervention led to the purchase of about $1 billion of non-performing loans (NPL’s) from Nigerian banks owed by major Nigerian airlines including Aero Contractor and Arik Air among others.

He said that the aviation sector accounted for around eight per cent of AMCON’s restructuring portfolio.

He added that the loan restructuring loan of airlines operators protected a critical sector of the economy.

“The corporations are very much in support of the survival of the aviation industry and its commitment jobs within the sector and across its supply chain.

“For the survival of the industry in short term, the government would typically have more direct control over these measures.

“This could be by scrapping Value Added Tax (VAT) in the aviation industry, waivers on landing, parking and navigational for an extended.

“Also government should look into suspension or reduction of air passengers’ duty to reduce the cost of travel and encourage passengers to buy tickets,’’ he said.

For Mr Bismarck Rewane, CEO, Financial Derivatives, said that there was need for investment in infrastructure and airport concession to reduce average cost and increase profitability.

Rewane said that due to the pandemic, exchange rate volatility would affect dollar dominated air travel services-spares, training and maintenance cost.

He said that in Africa, due to the effects of the pandemic, external imbalances and commodity fragility will persist.

According to him, in Africa, trade balances will slide into negative territory ($-15bn), while external debts burden will widen.

Capt. Dapo Olumide, CEO, Ropeways Transport Ltd., urged the government to ensure effective disinfecting of the airport and put all mechanism in place before reopening the domestic airports.

Olumide, however, raised question on how the management of Federal Airport Authority of Nigeria (FAAN) would ensure disinfecting the counter and sensitive areas of the airport at every 15 minutes to meet the best standard.

He agreed that airline operators needed bailout to bounce back into business.

He also suggested that taking away some of the multiple taxation by regulatory agencies and the provision of requisite infrastructure as well as the steady supply of fuel would assist them in the short term to stabilise, even faster that getting direct government funds.

“Plagued by a myriad of problems that tend to stifle efforts at efficient service delivery to passengers, investors in Nigeria’s domestic airline industry have called for an urgent government bailout to save the industry from imminent collapse.

“Government to, as a matter of urgency, come up with a strategy to bring all parties to the negotiating table to seek direct funding intervention, for the first time, for airlines to save the sector from collapse.

“Without the airlines, there is no aviation,’’ Olumide said.