Aviation Lockdown: Relief as Nigerian Government Propose bail out for Airlines even as resumption of service is in doubt

By Emmanuel Uffot

In a bit to cushion the harsh effect of the Covid- 19 on domestic airlines operators in Nigeria whose activities have been grounded since three months ago due to the Corona virus pandemic ravaging the world, the Federal Government of Nigeria has proposed a bail of N27 billion to domestic airlines in the country as part of efforts to put them in sound position to restart operations soon and keep the airports safe.

The bail out plans which was disclosed by the Aviation Minister Hadi Sirika will also cover logistics for the establishment of a private sector-driven national carrier that has been at the pipeline for over a decade now.

Incorporated in the bail- out are payroll grants to support the airlines, handlers, caterers and related services; provision of single-digit soft loans with long term repayment plan; and deferred payment of taxes and filing dates.

 Government is also to remove Value Added Tax (VAT) from airlines’ tickets as approved by the Federal Executive Council (FEC); provision of COVID-19 tests for all passengers and crew; waiver of airport rent fees to airport operators for the duration of the lockdown plus one month, and kick starting the processes for the establishment of a private sector-driven national carrier which has a 12 –month duration work plan.

Before the issue of bail out emerged, the Presidential Task Force on Covid 19 had fixed Sunday June 21 for the resumption of flight domestic flights operation, but the date was no longer be feasible as it has been put forward with no definite date pronounced even as NCAA has put this Saturday as flight simulation day as part of the processes to open activities. Similarly, Wednesday next week is fixed for processing of restart plan submitted by domestic airlines.

Murtala Mohammed Airport, Lagos

The Value News findings indicate that what led to the resumption date put off was that both the regulators and the local operators were not ready to resume as the various safety measures like putting the grounded airlines in shape to start operation which comes with huge cost will not be possible given the poor economic status of the operators with the bail -out fund not yet handy.

We also gathered that though 11 domestic carriers had submitted resumption plans to the Nigerian Civil Aviation Authority (NCAA) as demanded with two said to be already marketing their flight plans, the regulators are yet to come up with restart approval even as no positive word is coming from the federal government on the promised bail- out fund.

The apex regulatory body, NCAA, however affirmed receipt of resumption plans stressing that they were still being scrutinised, to ensure full compliance with the guidelines set for a safe re-start after about three months of lockdown.

Some operators have applauded the promised bail- out fund, which they described as a step in the right direction, but for Gabriel Olowo , President of the Aviation Safety Round Table Initiative (ASRTI) the grant was paltry. He said it would do very little to address airlines and their allied losses.

He does not accept the plan for the identified seven project elements in the aviation industry to go together in a swoop under the N27 billion estimated cost, urging the government to prioritise those that are key to a robust aviation sector in the country.

“Individual projects that are not COVID-19 related should attract special focus and special funding. All the project elements are key to a robust aviation sector in Nigeria. Government’s action is commendable. It is very necessary and is a good attempt, given the national income constraints during the year,” he said.

The Federal Government had in March after the index case of Coronavirus brought into the country by an Italian, shut down local and international commercial flight services as part of measures to slow the spread of the corona virus pandemic leading to the crippling of the aviation sector with estimated N180 billion losses and expected job losses on resumption.

The aviation lockdown had not only affected the legion of operators namely the airlines, custom agents, freight forwarders, business people and workers but had also impacted negatively on derivable government revenue from the aviation parastatals like the Federal Airport Authority of Nigeria, FAAN and its sister agencies like NCAA and Nigeria Airspace Management Agency, NAMA.

Prominent among the domestic airlines in Nigeria that are angling for the bail out to restart operation are Dana, Arik, Aero Contractors and Peace airlines among others.

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