The Federal Government has approved N4 billion as a bailout fund to airlines to cushion the effects of the impact of the devastation of COVID-19 on their operations.
Aviation Minister, Hadi Sirika made the disclosure on Monday in Abuja at a three day public hearing to 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).
Sirika also stated that the Federal Government approved an additional N1 Billion for aviation agencies to also cushion the sorry state of most of them which has made payment of salaries difficult.
The Minister however stated that very soon, the funds would be distributed to the carriers, stressing that the aviation industry in Nigeria was too crucial to fail.
He described the sector both in Nigeria and elsewhere as very important to economic development of any nation.
Not impressed with the N4bn to airlines, Chairman, Senate Committee on Aviation, Senator Smart Adeyemi urged the Federal Government to do more.
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.”
Sirika fired back, saying he had noted the plea of the National Assembly to give more financial support to the airlines but pleaded with the lawmakers to grant approval for funds to struggling airlines.
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.