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Aviation sector seeks revatilisation

• FG to bail out airlines  • Stakeholders bemoan poor state

THE country's aviation sector has once again come under scrutiny. Some airlines, notably, Aero Contractors and Air Nigeria are battling with operations, while Dana Air has again been grounded. And it is not yet clear when normalcy will return to the industry where the major operators are groaning under heavy debt burden.


Last week, the Federal Government finally succumbed to pressure to assist the country's dying airlines out of their financial mess as the Central Bank of Nigeria (CBN) has started working out modalities to rescue the carriers.
The apex bank, met with three aircraft manufacturers; Boeing Company, ATR and Embraer which on the occasion made presentations on the way to save the ailing domestic airlines from total collapse.


Besides the aircraft manufacturers, also present at the meeting chaired by the CBN governor, SanusiLamidoSanusi in Abuja, were representatives of Ministry of Finance, Ministry of Aviation, the six existing domestic airlines, Aero, Arik, Chanchangi, Overland, IRS, Med View Airlines and representatives of Asset Management Company (AMCON), which stood in for four of the six airlines which have been taken over.


The four airlines that AMCON stood for at the meeting were said to be indebted to AMCON to the tune of over N100 billion with one of the airlines owing it N59 billion.


Under the bailout arrangement, the Federal Government, through the CBN, is working out modalities that will assist the domestic airlines acquire brand new aircraft at a single digit interest rate which is  a departure from the past where airlines were forced to pay back 20 per cent interest on loans from banks.


Under the present arrangement, airlines that qualify for the bailout assistance will only part with 7per cent long term loans secured.
It was gathered that out of the six domestic airlines, only Med View had clean financial record, while the accounts of the other five were almost in red which has confirmed that the local airlines' financial status is down.
According to an insider who participated at the meeting but did not want to be quoted, the CBN boss stood his ground by insisting that three of the airlines must effect a change in their management structure before they could benefit from the fresh intervention fund being proposed by the Federal Government.
Sanusi, who was said to have expressed displeasure with the manner some of the airlines were being managed, noted that the only way out for the affected airlines to be rescued from the financial mess was to re-organise their management structure and come up with a good business plan for profitability.
Fuel
As the FG and the airlines workout the bailout modalities, National Daily discovered that the industry is still grappling with other subtle challenges like aviation fuel for instance. The Chief Operating Officer of Chanchangi Airlines at the MurtalaMuhammed Airport Terminal 2, Lagos, Mr. Babadiya, said the supply of aviation fuel has been stable in recent months but noted that the cost of product is very high.
Ahmed said the product is pegged at between N160 and N165 per litre in Lagos depending on the marketer and “the arrangement you have with such marketer.”

 

Outside Lagos, he said the product costs as high as N175 per litre.
“You can negotiate the price based on the volume required and that can give you an advantage. Nevertheless, whatever price you get, the cost is still high,” he said.
Ahmed also said the airlines had no access to credit, saying most marketers would rather relate with the carriers on a cash-and-carry arrangement because of airlines' previous indebtedness to them.


“So, you now have a situation in which an airline has to deposit a huge sum with the fuel vendors before the product is supplied”, he added.
He said several efforts were made in the past to find ways of reducing the cost of the product but nothing was achieved.
According to him, “with the situation we are now, with low passenger patronage as experienced especially in the first six weeks into the year, airlines are using all they have to be able to fly. We experience lots of challenges to be able to balance our account”.
Ahmed added that the exorbitant fuel cost had had a telling effect on domestic airlines' bottom line “as you have to spend virtually all your money on fuel.”
Safety
Stakeholders in the industry have however commended the Federal Government and the Nigerian Airspace Management Agency (NAMA) for the establishment of Total Radar Coverage of Nigeria (TRACON), which together with effective communication has significantly improved safety in Nigeria's airspace but stated that poor power supply in the country may frustrate the gesture.
The power situation in the country is still bad, stated theSecretary of the Aviation Round Table (ART), Samuel Akerele, and called on NAMA to boost power supply to the facility, noting that for optimum performance, the radar should rely less on public power supply.
On communication in the airspace, Akerele explained that NAMA has sectorised the communication system and that it has boosted the radio frequencies. He noted that the agency is also redesigning the airspace to further improve communication.
The ART Secretary also recommended that NAMA should establish another control centre in Warri to attend to aircraft flying in the south, south region and along the waterways to enhance radio communication in the airspace around the area.
“I have also recommended that they (NAMA) should have a third control centre maybe in the Warri area to take care of the flights over the oceans and then they will make more money. Now we only have only two area control centres Lagos and Kano but with this great traffic and the Niger Delta helicopter operations, we need to put one around Warri to handle the traffic so that they don't leave Calabar and start calling Lagos; that is quite a long distance and the radio range, they have their range, so put an area control centre in Warri and then it will control that traffic and transfer to Lagos,” Akerele said.
Manpower
Also, Chairman, Senate Committee on Aviation, Sen. Hope Uzodinma, lamenting the state of deficiency in the sector, decried the dearth of skilled manpower in the aviation sector.
The Senator identified this deficiency as a factor which has prevented the sector from growing and gaining better global recognition despite its numerous potentials.


Uzodinma, who was speaking at the opening of the Association of African Training Organization (AATO) constitutive assembly organised by the Nigerian College of Aviation Technology (NCAT) in Abuja said over the years, there has being over dependence on the International Aviation Training Institute, at the expense of African training centres.
However, he said it was imperative for members of the National Assembly (NASS) to support NCAT and ensure that the influx of foreign pilots and aviation personnel's in the country are reduced drastically.

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