Save Airlines from total collapse with N50b bailout..Reps tell FG, upset over NCS disregard on aircraft waive

House of Reps Committee on aviation members at the news conference

The House of Representatives Committee on Aviation has proposed a bailout of N50 billion to be released to the airlines to save them from total collapse.

This is just as the committee frown at the Nigeria Customs Service for flouting President Buhari’s directive on waive on spare parts.

The Committee Chairman, Nnolim Nnaji at a news conference said the bailout was to also avert their threat of shutting down operations which would have severe consequences on the overall economy of the country.

He stressed that if developed countries could give bailouts in billions of dollars to their airlines to cushion the impact of coronavirus, with all the incentives at their disposal,  Nigeria Airlines were suffering without help.

According to him, America, Canada,Brazil,Rwanda, Senegal, India, China, Korea, United Kingdom and several European countries injected funds into the aviation sector because they understood the importance of the sector in their national economies.

Mr. Nnaji noted  that in the wake of the coranavirus pandemic, the International Civil Aviation Organization, (ICAO) canvassed  continued financial and regulatory support, particularly financial relief that does not increase industry debt levels through direct cash injection,credit or loans and discounts on user charges to support airlines over the restart and recovery period.

 Nnaji said, regrettably, few African countries like Rwanda, Senegal, Cote d’ Ivorie, Burkina Faso and Cape Verde responded while Nigeria’s pantry N4billion promise was yet to be released to the airlines.

The House Committee Chairman also took a frowned at the Nigeria Customs Service for the continued collection of import duties on imported commercial aircraft and spare parts despite the the President Muhammadu Buhari’s executive order exempting them as well as at the persistence imposition of value added tax, (VAT) on importation of aircraft and spares by Federal Inland Revenue, (FIRS).

He chronicled other problems confronting the airline operators thus: inability to access foreign exchange at the official rate, hight cost of funds and lack of single digit lending interest rate.

Others are multiplicity taxations, fees and changes, multiple entry points and frequencies granted foreign airlines and the externalisation of insurance placement for domestic airlines  as well as the unnecessary delays they suffer for weeks in clearing aircraft on ground, (AOG) spare parts for aircraft.

The continued rising cost of aviation fuel, (JET-A1), over regulation of domestic airlines and inadequate night landing facilities in most of the airports which reduces the airlines’ operating flight hours among others were also part of the concerns raised before the committee by the airline operators.

 Nnaji noted that as a Parliament, ” we are going to look into these demands and more especially to find out why the Nigeria Customs Service would not respect the president’s Executive Order on duty exemption meant to lighten the burden of the airlines”