Airline operators outline post-COVID-19 survival plan for industry

Airline operators outline post-COVID-19 survival plan for industry

Monday, April 20, 2020 10:47 pm

Murtala Muhammed International Airport, Lagos

The Airlines Operators of Nigeria (AON) has appealed to the Federal Government for immediate access to the N50 billion COVID-19 Intervention Fund with the Central Bank of Nigeria at five per cent interest rate.

Capt. Nogie Meggison, the AON Chairman, made the appeal in a statement issued in Lagos on Monday.

Meggison said it was part of the association’s plan to ensure the survival of the sector, once the COVID-19 pandemic was over and economic activities resumed.

He said: “We appreciate the CBN’s approval of N1.1 trillion stimulus and the recent N50 billion COVID-19 Intervention Fund to jumpstart the economy.

“AON would appreciate immediate and simple access of the funds to Aviation at an interest rate of not more than five per cent.

“Also, some quick low hanging palliatives that the Federal Government may consider to mitigate the impact of the pandemic on the Nigerian economy and the aviation sector include implementation of President Muhammadu Buhari’s Executive Order on Removal of VAT from all forms of transportation.

“As domestic airlines are still the only form of transportation paying Value Added Tax (VAT).

“Also, we seek suspension of all Nigerian Civil Aviation Authority (NCAA), Federal Airports Authority of Nigeria (FAAN) and Nigeria Airspace Management Agency (NAMA) charges for domestic operations within the country for 180 days.

“And subsidy for payment of workers’ salaries at least to cover six months from March to September 2020 so that staff are not sacked,’’ Meggison said.

He said that the above measures were practical steps that would be a win strategy for all players in the sector and that would jump-start the wheel of the Nigerian economy to keep moving.

He explained that the International Air Transport Association (IATA) noted that the COVID-19 crisis would see airline passenger revenue loss by 314 billion dollars in 2020; putting at risk 25 million jobs that were dependent on aviation globally.

Meggison said that as a result of the COVID-19 pandemic, Nigerian Aviation had an exposure of about 251,000 direct job losses.

He said according to the International Air Transport Association (IATA), this included the various parastatals, ground handling and support service providers, etc.

“As a way forward, government can take a cue from the American model of offering 50 per cent funding and grants and 50 per cent palliatives through waivers and suspension of taxes, levies and fees, etc.

“For instance, the U.S. Government granted a $58 billion bailout to the airline industry as well as loans and grants for airlines.

“Similarly, UK airlines asked for 7.5 billion Pounds; while India made available $1.6 billion rescue plan for aviation.

“Also, Singapore announced $112 million for aviation, while Australia granted a bailout plan of AUD298 million for the sector,’’ he said.

Meggison said that the lockdown was also a double blow for the Nigerian economy due to the drop in the price of oil which is the mainstay of the country to below $15.

He said from the foregoing, it was clear that the Nigerian economy and indeed the aviation industry required urgent government articulation of plans, if the jobs of Nigerian youths must be preserved post-COVID-19.

Meggison urged government to kindly consider and immediately approve the above rescue plan for recovery of the Aviation industry post-COVID-19 and to support domestic airlines to survive, which was a catalyst of the economy.

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One Comment

  • fdee says:

    A post COVID-19 pandemic scenario in the immediate future is at best a dream and realistically living in a fools Paradise for any industry worldwide. At least not in 2020 and hopefully from 2022-25. So all businesses and industries should start getting ready to fold up and or collapse especially large companies and those quoted on the stock exchanges and requiring loans and bonds to remain afloat. It is therefore time for Nigerian debt dependent companies to start laying off Deadwood staffs over 60yrs and quota system and non productive community staffs below 25yrs. A stitch in time saves nine.

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