The Federal Government has approved N4 billion as a bailout fund to airlines to cushion the effects of COVID-19 on their operations, Aviation Minister, Hadi Sirika, said on Monday.
He spoke in Abuja at a three day public hearing on repeal and enact Acts of Nigerian Civil Aviation Authority (NCAA), the Nigerian Airspace Management Agency (NAMA), Accident Investigation Bureau (AIB), Nigerian College of Aviation Technology (NCAT), Nigerian Meteorological Agency (NIMET) and that of the Federal Airports Authority of Nigeria (FAAN).
According to the minister, the government approved an additional N1 billion for aviation agencies to help them in payment of salaries, which has become difficult for them.
Sirika said that the funds would soon be distributed to the carriers in order help stablise the sector which he described them as critical to economic development.
Chairman, Senate Committee on Aviation, Senator Smart Adeyemi, however thinks that the sector needs much more than the N4billion intervention.
His words, “N4bn is very little to solve some of the problems of the airlines who are battling to survive. We urge the government to take charge of the sector. They need to give them more and they also need to support in all ways.”
He warned that if nothing was done to assist the carriers, the tendency for them to cut corners was very high in the midst of dwindling liquidity.
“Yes, the airlines are in business but we cannot continue to look at them without offering them assistance. I am not comparing Nigeria with the United States, but I think we can do better than the N4b we are assisting them with.”
The International Air Transport Association (IATA) urged the government to implement specific financial relief measures for aviation to ensure that the sector will be capable of driving the recovery.
Prior to the crisis, aviation contributed $1.7 billion to Nigeria’s GDP and supported 241,000 jobs.
IATA estimates that the COVID-19 crisis puts 124,000 Nigerian jobs at risk and some $900 million of the country’s GDP.
The Nigerian government has introduced broad economic relief packages to mitigate the devastation caused by COVID-19
“Nigeria has announced general relief measures for sectors affected by COVID-19, but not specifically for aviation. Given the importance of air transport for Nigeria’s economy and connectivity, the government must not let aviation fail.
The industry faces a liquidity crisis. Without a viable aviation sector Nigeria’s eventual recovery from COVID-19 will be longer and even more painful. Aviation-specific financial relief measures are urgently needed as a matter of survival,” said Muhammad Albakri, IATA’s Regional Vice President for Africa and the Middle East.
