Much Ado About N27bn Aviation Sector Bailout Fund

Aviation sector
Murtala Muhammed International Airport, Lagos.

BEVERLY HILLS, April 05, (THEWILL) – ANTHONY OKECHUKWU looks at the intrigues that played out in disbursing the N27 billion bailout fund earmarked for the aviation sector

In response to the losses incurred during the lockdown, the Nigerian Government had released N5 billion out of the proposed N27 billion to operators in the aviation sector. According to the Government, the fund intervention is a kind of measure to restart air travel and keep the airports safer.

Since the release of the fund, airlines, travel agencies and service providers have shared the N5 billion intervention funds for Covid-19 granted to all members of the aviation sector. The special intervention was open to all airlines with a valid Air Operating Certificate (AOC) and distributed according to the size of the carrier.

Beneficiary Airlines/Operators

In sharing the fund, the Airline Operators of Nigeria (AON) agreed to a five per cent deduction from the approved N4 billion given to both scheduled and charter operators, as part payment of debt owed to the Nigerian Civil Aviation Authority (NCAA), Federal Airports Authority of Nigeria (FAAN) and Nigerian Airspace Management Agency (NAMA).

Operators such as Air Peace, Azman, Arik and Dana Air have received their own share of the fund. Others include the ground handling companies, National Association of Nigerian Travel Agencies (NANTA), Aviation fuel marketers as well as airport car hire services.

In the breakdown, the scheduled commercial operators all received the sum of N3 billion, out of which N150 million was deducted as five per cent debt to the regulators.

The N150 million deductions earned FAAN N75 million; NAMA N37.5 million and the NCAA N37.5 million. Charter operators got a total amount of N1 billion, with N49.9 million deducted as five per cent debt payment to regulators.

The N49.9 million deductions earned FAAN N24.9 million; NAMA N12.5 million and the NCAA N12.5 million. Ground handling companies, Aviation fuel marketers and catering services got N233.3 million each. The National Association of Travel Agencies (NANTA) received N200 million, out of which N4 million was deducted for the regulatory agencies. Airport Car Hire Association of Nigeria (ACHAN) received from the ministry N100 million as COVID-19 palliative.

The Controversies

Since the Government doled out the aviation intervention fund, operators in the sector have been lamenting over the inadequacy of the fund or lack of access to it at all.

The situation has however, created “bad blood” amongst stakeholders in the aviation industry, particularly the airline operators.

Already, there are complaints that most airlines are yet to get any disbursement from the N5bn aviation palliative shared from the N27bn disbursed to the industry by the Central Bank of Nigeria (CBN).

Although only N 5 billion have been released out of the N27 billion, questions are being asked about the secrecy of the fund disbursement and the whereabouts of the remaining N22 billion.

Stakeholders’ Views

In his reaction, Aviation Security consultant, Group Captain John Ojikutu, stated that there are more important projects in the sector, such as runway lighting at the Murtala Muhammed Airport, which is expected to have been executed in the first quarter of 2021 as well as perimeter fencing and other sensitive areas.

Wondering over other purposes that the balance of N22bn will serve, Ojikutu said, “We have been talking of MMA runway 18L lightings, so are the lightings of the runways of most airports, yet we are claiming satisfaction in the NCAA certification for them.

“There are security issues around most airports perimeter fences that we have not been able to enhance their security in the event of any incursions or invasion especially now that bandits are said to be everywhere.

“There is the ATCs communication to be addressed, so are the periodic maintenance of the navigation aids, radar and others. Quite a lot must be done on the new airports’ terminal buildings, but the revenues are not coming because of the Covid-19 lockdown; the revenues are not coming because there are no flights and government aviation staff cannot earn salaries.

“If the airlines are getting palliatives to revamp their operations and pay salaries, we should expect the same for the government agencies, their equipment and staff and others. There is a need to know how much is needed for these. We need to know for the six aviation agencies: how much for the new ‘national carrier’? We need to know. So, ask the National Assembly Senate and House of Representatives that approved the money and the ministry that is disbursing it”.

THEWILL gathered that domestic airlines such as Aero Contractors, West Link, TAL Helicopters and a few others are yet to receive their own share of the initial N5 billion. Ibom Air was equally excluded on the reason that it is a state-owned airline.

Speaking on their predicaments, Engr. Femi Adeniji of Tropical Arctic Logistics (TAL) Helicopter Company, said his organisation is yet to get their share.

Adeniji said, “I have called the Federal Ministry of Aviation; I have four helicopters that I am operating. They asked us to send account numbers, which we did.  I have been calling to know what is going on. Unfortunately, I was in the US when my company’s name was published as among those who will benefit from the palliative, but we have not received anything up until now.

“They said they were going to give it to us, salaries are still being owed, staff are complaining. If they say they are going to give us, let them give us. They should not put it in the newspapers, and nothing happens thereafter.

“I understand they got N25bn from the government and they are giving us N5bn. Even at that, why give some airlines and not give the others?”

In his own part, Capt. Ibrahim Mshelia of West Link said his airline is yet to get the fund which had been given to others without any cogent explanation.

“My office submitted the necessary documents. I am a member of AON. There is no leadership of AON as far as I am concerned because we are already in court. The minister and all the relevant people were served. They said we should submit our account and other details to the ministry of aviation for the collection of palliatives. We wrote to the minister directly and drew the attention of the committee,” he said.

Speaking further, the airline operator added “What I can say is that everything seems to be shrouded in secrecy. Nobody knows anything. I know the government has given us money and I heard some people have not received it. I know other colleagues who have not equally.

“It is obvious the ministry just handpicked those they wanted. They do not want to give. It appears that we are less in number that did not receive. It is obvious a few of us were targeted. Whatever reason, I do not know. Nobody has called me why I have not received and when I will receive it”, Mshelia emphasised.

Commenting on the remaining N22 billion fund, former Secretary General of the National Union of Air Transport Employees (NUATE), Comrade Olayinka Abioye, said, “I am not sure if the money has been released to the ministry, the agencies are still struggling to get the money from ministry of finance. All agencies have submitted their needs, which is mainly on staff salary and overhead.

“The agencies are liaising with finance for the money, but I was made to understand that there were small challenges between the finance and aviation Ministry”.

Outstanding N22b Fund

The Minister of Aviation, Hadi Sirika, had stated that the remaining N22bn would be expended on aviation roadmap and national carrier.

Apart from supporting the airlines, the outstanding fund is expected to also fast-track the establishment of a private sector-driven national carrier.

But national carrier project had already been suspended by the Federal Executive Council (FEC) in September 2018, months after the unveiling of the Nigeria Air logo at the Farnborough Air Show in London.

Till date, the suspension of the Nigeria Air has not been lifted and no approval has so far been given in that direction by the lawmakers.

House Committee Intervenes

To unravel the issues surrounding the poor disbursement of the intervention fund, the House of Representatives Committee on Aviation has stated that it will investigate the complaints by airline operators and other stakeholders on the handling of COVID19 aviation palliative.

The committee chairman, Hon. Nnolim Nnaji, who made the promise assured that the growing concerns being raised by stakeholders regarding the matter were too weighty to be ignored.

Hon. Nnaji disclosed that the House Committee on Aviation has resolved to demand the detailed disbursement of the intervention fund from the Ministry of Aviation.