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FG providing N27bn financial support for aviation sector



National Carrier To Commence Operations Soon – Aviation Minister Sirika

The Federal Government has put in a process to ensure the revival of the aviation industry after the devastating blows suffered by the sector in the hand of Coronavirus pandemic and lockdown.

To achieve this, government is providing N27 billion financial support for the sector in its economic plan christened ‘Nigeria Economic Sustainability Plan.

Following the health and economic emergencies caused by the COVID-19 outbreak, President Muhammadu Buhari established the Economic Sustainability Committee (ESC) on March 30, 2020.

Members of the committee include Vice-President Yemi Osinbajo, ministers of finance, budget and national planning, states, aviation, industry, trade and investment, agriculture and rural development, works

It also seeks provision of single digit soft loans, with long term repayment plan payment of taxes and filing dates, ensure the removal of Value Added Tax (VAT) from airline tickets as approved by Federal Executive Council (FEC), provision of COVID-19 tests for all passengers and crew and waiver of airport rent fees to airport operators for the duration of the lockdown plus one month.

The committee took a holistic view of the aviation sector with plans to save existing aviation industry organisations and jobs, through a targeted stimulus package and fast track the establishment of a private sector driven national carrier.

The guiding principle is to strengthen the aviation sector so that it survives and creates job opportunities and supports general economic activity including transport logistics.

The entire scope of work includes extension of grant support including payroll support to the aviation industry includ  ing airlines, handlers, caterers and related services.

Consequently, the Minister of Aviation, Hadi Sirika, has been given the nod to begin processes for establishment of private sector-driven national carrier.

The entire cost of the projects for revival of the aviation sector, including the establishment of a private sector-driven national carrier would gulp N27 billion. The entire project has March 2021 time line to be supervised by the Ministry of Aviation.

The debate for national carrier for Nigeria will never go away depending on the side or position one takes. It is a position of naysayers and optimists. It is the most contentious debate that no one will ever win until the Federal Government matches its words with action.

Some have argued that there was no reason for government to waste scarce resources on a new national airline at a time countries all over the world are making attempts to save their airlines; airlines themselves are restructuring decisively, trimming down their workforce and resting their airplanes which operational cost could dig big holes in their finances

But for those who support the floating of national airline for Nigeria, they argue that the country appears to lose so much money to foreign airliners in spite of series of network of routes or the capacity to operate extensively on many lucrative routes. Unfortunately, the limited private airlines that attempt doing so do not seem to have the wherewithal and capacity to fund such extensive foreign operations.

In addition to serving as a platform for conveying passengers to their various destinations, a national carrier remains a vehicle for international relations and trade.

A successfully-run national carrier, according to them is capable of changing the debilitating outlook of Nigeria that has been reported to be losing about $2.3 billion on annual capital flights to foreign airline.

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