Saturday, Oct 24th 2020 3:34 PM

Market Digest Nigeria


Nigeria’s Aviation Sector Stakeholders Seek Bailout to Protect 8,000 Jobs

Aviation stakeholders have canvassed for a bailout for the sector to prevent plunging the industry into a crisis that could erase 8,000 jobs.

They said the suspension of aviation activities in the country occasioned by the COVID-19 pandemic would negatively affect airlines and might lead to job losses unless the federal government comes to their rescue. According to them, a bailout package needs to be designed for the sector to support their activities, saying signs of bankruptcy have already been indicated among the local carriers.

The Chief Executive Officer (CEO) of Aero Contractors, Captain Ado Sanusi, said that Nigerian airlines would resume after the COVID-19 lockdown with very little working capital due to lack of revenue generation. He said this would affect their operating capacity, noting that many of them would reduce capacity in order to cope.

“There are three things that will happen. One, some will lay off workers in order to survive; two, some may not be able to survive after laying off workers; three, some airlines will go to their shareholders to ask for more operating funds to restart the business, otherwise, they will go under,” Sanusi said.

He explained that the suspension of flights would adversely affect the nation’s effort to grow the economy after the COVID-19 pandemic must have been tamed.

“If the airlines are not given bailout, they will go into bankruptcy and this will slow the growth and recovery of the Nigeria’s economy. So, it will make it more difficult for Nigeria’s economy to recover. Air transport is a catalyst without which a nation’s economy cannot grow,” Sanusi added.

Industry consultant and CEO of Belujane Konsult, Mr. Chris Aligbe, said that airlines play pivotal role in driving any nation’s economy and without their contributions, any nation’s economy would be imperiled. He advocated immediate bailout of the airlines after the COVID-19 pandemic so that the airlines could continue to operate and play their roles in revamping the economy.
Aligbe said: “The first thing to do is to give the airlines a grant; a grant that will get them up and going again. This will also ensure that about 8,000 airline workers don’t lose their jobs. The government is working to make sure that there is employment.

“Those who are already in employment should not be thrown out because of what has just happened; that is what other countries are doing. Even other countries are going around to give stipends to their citizens. “We may not have all that money to do this, but what we need to do is that the institutions, the organizations or corporations that provide a livelihood for Nigerian citizens through their employers must be made to come back again. Must be reactivated and the way to reactivate them is to give them grants.”

Former General Manager, Business Development, Federal Airports Authority of Nigeria (FAAN), Mr. Nuhu Adam, said instead of a direct bailout, the government should direct aviation agencies to reduce charges paid by airlines and also to urgently install airfield lighting so that airlines could operate for longer hours and improve the utilisation of their aircraft.

“I don’t support bailout for airlines because from past experience they tend to divert the money to other businesses; unless the grant would be tailored towards achieving specific objectives,” he said, adding: “What I may propose is that there should be significant reduction for charges like landing and parking and FAAN should urgently install runway lights at airports in Calabar, Asaba, Owerri and others so that airlines can operate longer hours and make full utilisation of their aircraft.”


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