New Telegraph

Intrigues as airlines get FG’s N4bn bailout fund

Scheduled carriers share N3bn, charter receive N1bn

The Federal Government has kept to its promise with N4 a billion bailout that has been handed out to the carriers as a way of cushioning the effects of COVID-19 crises on the operations of the airlines.

This is, however, not without rancour among the airlines on how the fund should be disbursed and how the executive of Airline Operators of Nigeria (AON), especially the President, Dr. Abdulmunaf Sarina and the Vice-President, Mr. Allen Onyema, arrived at 70-30 per cent ratio.

New Telegraph learnt that there was a hot debate among the operators when they met over the matter two weeks ago. The duo of Sarina and Onyema, who are both chairmen of Azman and Air Peace respectively, had come under scathing criticisms for the manner they are handling the bailout funds without carrying other airline operators along.

A reliable source, who is an operator, told our correspondent under the condition of anonymity that the AON Board of Trustees (BOT) and the executive numbering 10 had a heated argument nine days ago over the sharing of N3 billion to six scheduled operators out of the N4 billion released to the carriers whilst the remaining N1 billion is yet to be shared to non-scheduled carriers.

Azman, Air Peace, Arik, Aero, Overland, and Dana are the beneficiaries. But it is unclear if the fund was extended to airlines that temporarily ceased operations with plans to resume services this year.

The source said: “Four airlines got some token change. I understand that some BOT members and other operators may be starting an enquiry soon.” The AON President, Sarina, in an interview with New Telegraph, confirmed that the Federal Government had released the funds to the airlines as promised. He declined to speak further on the matter. Nigerian airlines are in serious financial dire straits occasioned by COVID-19 that has done incalculable damage to their businesses as some of them are at the brink of extinction.

Before COVID-19, the lack of access to foreign exchange, high cost of spare parts, lack of synergy among the carriers, poor business strategies and lack of capital to run the highly capital intensive airline business had been the bane of the airlines.

Since the Minister of Aviation, Hadi Sirika, announced the decision of government to assist the carriers with N4 billion bailout, rather than being succour for them, airline operators had been at loggerheads over modalities for sharing the N4 billion bailout.

They initially mooted the idea of excluding stateowned airlines like Aero, Arik and Ibom Air from those to benefit from the money. A top official of a statebacked airline had last month told our correspondent that this matter was capable of tearing the seemingly fragile relationship of the carriers apart, saying that the Ministry of Aviation may have concluded plans to buy into the argument not to support them.

The source further disclosed that a popular airline operator, apparently with huge number of Boeing aircraft and another with dominant operations in the northern part of Nigeria are alleged to be the arrowheads of the plan to exclude state-funded airlines. According to the source, “it is true that there is a grand plan to exclude statebacked airlines like Aero, Arik and Ibom Air from the bailout. “The target was really Ibom Air, because they believe that the carrier is already funded by the state government.

The airline was eventually excluded from the list of beneficiaries. “Two operators are at the forefront of this action and it is like the Ministry of Aviation is listening and buying into that argument.

But what we should realise is that in other climes, there is no discrimination in assisting airlines in whatever form they come from stimulus funds.” Sirika had on November 2, 2020 announced the approval of N4 billion to troubled Nigerian airlines and N1 billion to various aviation agencies. In his reaction, Chairman, Senate Committee on Aviation, Smart Adeyemi, described the amount as too small to solve the problems of the airlines.

Read Previous

Tony Elumelu Foundation: We’ll empower African entrepreneurs

Read Next

FG: Citizens earning N30,000 monthly to own houses

Leave a Reply

Your email address will not be published. Required fields are marked *