Again, airlines push for N200bn bail-out

Airline operators are clandestinely pushing for another round of bail-out as a way of saving their businesses, New Telegraph has learnt. The operators are emboldened by the fact that the Federal Government had, in a resolve to end the lingering crisis of unpaid workers’ salaries in the country, especially in several states of the federation, recently approved a comprehensive relief package designed to salvage the situation. In addition to the direct cash bail-out, the three tiers of government were expected to share $1.7 billion from the Excess Crude Account (ECA).

Some of the operators who spoke to our correspondent under the condition of anonymity, said that all they are waiting for is the appointment of a minister for the sector through which they would channel their request to government. Some of the operators disclosed that the amount they are requesting is in the region of over N200 billion with a caveat that government gives them long period to offset the debts at three per cent interest rate.

One of the operators said that in other climes such as the United States, government had rescued carriers that were in serious financial dire straits, especially during September 11 when carriers in America were on the verge of collapse, occasioned by the terrorists’ attacks. Asked why the operators were demanding another round of bail when the first one given to them some years back had not been repaid, he said that government at that time neither administered the funds very well nor ensure that it was channeled very well to achieve the desired effect.

He, however, reiterated that under the new scheme, he was very sure the funds would be properly administered. Experts are, however, divided over the development. Former Commandant, Murtala Muhammed Airport, Lagos, Group Capt. John Ojikutu (rtd), stated that the airline bail-out given eight years ago was controversial at the time and today still rankles many taxpayers and fliers. Of the over N100 billion that was disbursed, the defunct Air Nigeria is the lead beneficiary with N35.5 billion, followed by Aero with N20 billion. Arik Air had accessed N15 billion, Kabo Air N6.66 billion and Chanchangi Airlines N3.4 billion. Others are Dana Air – N618 million, Caverton Helicopters – N1.348 billion, Overland Airways – N805 million and FirstNation Airways N271.7 million.

“Lots of people believe that government should have let big airlines fail; after such a shakeout, they say, maybe we’d have better service from stronger survivors and creative start-ups today,” Ojikutu said. Others however argue that the airline industry is vital to the nation’s economy, and a widespread collapse could have been devastating at a time of enormous economic and emotional trauma for the nation. The newly elected President of Aviation Round Table (ART), Gbenga Olowo, accused the Asset Management Company of Nigeria (AMCON) of misplaced priorities in the bail-out and takeover of some airlines in the industry, adding that the sincerity of AMCON in the issue was in doubt.