The Presidential Sub-committee on proffering solutions t o challenges facing the airline industry in Nigeria Thursday submitted its repor t to the federal government.
It recommended that government should introduce financial transparency into the industry by making public all airlines outstanding debts to government, verify, r econcile and freeze all outstanding debt payments to government parastatals.
The sub-committee of airline operators, led by Captain Edward Boyo, also canvass ed for the creation of Nigeria Airline Industry Revival Action-fund (NAIRA-Fund)
where registered indigenous airlines can access loan capital at subsidized inter e st rates with 10-15 years repayment schedule.
The fund was initially recommended for establishment by the Federal Government i n conjunction with Nigerian banks by the 2006 Committee, led by Chief of Defence
Staff, Air Chief Marshal Paul Dike, but was never implemented.
It also recommended a review by the Central Bank of Nigeria (CBN) of exchange co ntrol approval and create a special window for airline foreign exchange transact i ons.
It, however, added that in the operation of this special window, the criteria fo r this privilege should be the possession of a valid AOC or NCAA recommendation.
The report, submitted to the Chief Economic Adviser to the Acting President, Dr. Tanimu Yakubu, had fingered 10 areas the airline operators wanted government to
give urgent attention, especially the massive debt burden to regulators, service
providers, suppliers and financial institutions.
There were reports that the bailout package for the troubled aviation industry, worth over 10 billion naira, may be threatened following a disagreement among th e airline operators.
Yakubu, however, expressed disappointment that after three months of consultatio n among the operators, they could not approach government with any substantial p o sition paper.
The federal government had last October requested comprehensive details that req uire urgent government intervention in the aviation sector but unable to resolve
their disagreement, the airline operators appeared before top government officia l s with two distinct reports.
One of the two factions was led by the Chief Executive Officer/ CEO of Arik Airl ine, Mr. Arumneme Johnson, while the other was represented by Captain Boyo, who i s the head of Overland Airlines.
While some of the operators, led by Johnson, are not comfortable with the federa l governmentâ?s direct bailout of the troubled aviation industry, the Captain Bo yo camp appears favourably disposed to it.
Johnson, who submitted an independent report, urged the federal government not t o support domestic airlines that are into promotion as their actions are against
robust business growth.
He was of the view that domestic airfares should be increased by over 100 per ce nt to enable domestic operators make ends meet.
Boyo, however, stated that â?conscious of the possibility that the government p arastatals may express concern about the perceived reduction in revenue and poss i bly resist the approval of these recommendations, “we bring the attention of Mr.
President that, in the long run, the concessions to the airline industry will in c rease air traffic and magnify the volume of business and consequently the revenu e to the government.
“In the immediate and to cushion the perceived loss in revenue of the aviation p arastatals, government is enjoined to provide increased budgetary support for th e aviation parastatals.â?
Listing high operating cost, aviation fuel, infrastructure at the airports and a ir space, multiple tariffs and charges, training and Central Bank of Nigeria For e x policy as critical areas, the reports warned of adverse consequences should th e government turn its back on the outcome.
The reports, among other things, also want the landing fees in Nigeria airports to be reduced by 50 per cent up to the year 2020, parking fees to be reduced by 5 0 per cent up to 2020, rental charges for office space at Federal Airports of Ni g eria (FAAN)-managed terminals to be reduced by 50 per cent up to 2020, lease rat e for land at Nigerian airports to be reduced by 75 per cent up to 2020.
AON also recommended that Nigerian airlines should retroactively accorded pionee r status with moratorium benefits with respect to development of maintenance han g ers and fuel facilities, land lease term to be increased to 99 years in line wit h the governmentâ?s Land Use Act, fuel surcharge of N1.60k per litre being paid t o FAAN for Jet A-1 aircraft fuel to be abolished with immediate effect, airport s ervice recovery charges to be reduced from 20-5 per cent, Nigeria Airspace Manag e ment Agency (NAMA) en-route navigation charges to be abolished for domestic flig h ts
â?Therefore, taking into consideration the Yamoussukro Declaration, Banjul Acco rd and the United States (US) Open Skies Policy, our appeal to government is to r estrict foreign airlines to a single airport of entry (their choice) from Januar y 2012.
“Foreign airlines will then be encouraged to enter into commercial agreement wit h domestic airlines for onward distribution of traffic.
“This policy will accelerate the development of the Nigerian airline industry an d encourage Nigerian airlines to expand into international routes in the long ru n . In addition, participation in the domestic air charter market by non-registere d airlines should be prohibited and enforced,â? the report suggested.
