Operators disagree with Aviation Minister on N516bn Debt
Published On 13 Feb, 2018

 

Last week the Minister of State, Aviation, Senator Hadi Sirika claimed  that Nigerian carrier owed the aviation agencies and other companies the alleged sum of N516 billion debts, airline operators are now questioning the veracity in that report.

According to the minister, who spoke to journalists last week at the Murtala Muhammed International Airport (MMIA), Lagos he described the Nigerian airlines as weak and incapable to compete, talkless of taking advantage of the liberalization of African airspace, known as Single Africa Air Transport Market (SAATM).

Nevertheless, the Executive Chairman of Airline Operators of Nigeria (AON), Captain Nogie Meggison made accusations about the Minister uttering out figures off hand, figures that he couldn’t justify. He said the aviation agencies lacked the ability to accurately do a transparent documentation of records and revenue, so as to know the debts owed to them by the airlines.

“We have always asked them to list the debts. It is easy to call numbers. Let those we owe bring their bills and explain the debts. Although government cannot be held responsible for the operation of privately owned airlines, but the Asset Management Corporation of Nigeria (AMCON) is competing with airlines, running two airlines with tax payers’ funds. So we don’t have a level playing ground because AMCON is a competitor, using the taxes we pay to compete with us. When are they going to leave the airline industry?”

According to domestic airlines who weren’t in support of the said figure, they claim that as long as airlines render services they would definitely incur debts from service providers, which are normally settled.

“Talking about debts, airline business is not a cash business ‎you accrue the charges you are presented a bill and you pay. No airline in this world that does not owe,” Meggison said.

The AON Executive Chairman made claims that if they wanted the new policy to work, Africa Civil Aviation Commission (AFCAC) should bring forth a level playing field for ‎every member in the country, since charges will remain the same amount from one country to another. In Nigeria, an airline borrows money at 24 percent interest rate, to pay 5 percent to the Nigerian Civil Aviation Authority (NCAA), and another 5 per cent VAT. But in other countries things like these are waived by their government for their own airlines.

According to the former Vice-Chairman of Arik Air, Senator Anietie Okon, he stated that if the aviation ministry is not doing well as claimed by the minister then it is partly the fault of the minister, as the responsibility of the aviation sector falls on him to ensure the betterment of this sector. He also stated that the airlines would not owe that much if they are doing well in their operations.

He noted that the minister should know the value of the possessions of an airline and the percentage of debts to the airline before making conclusions that the debts can’t be paid.

“If the total debts of an airline are just 10 percent of its assets, how can you say that the company is insolvent?”

Okon also said that because of the crucial role of airlines in the economy of every nation, the governments should sincerely give airlines the support, whether its been owned privately or by the government themselves.

He remembered at a certain point when airlines like Jet Airways of India, South Africa Airways, Kenya Airways, and the current Emirates had financial issues that they had to depend on their government to bail them out, so as to sustain operations in the sector. So if their government can do so, why can’t the Nigerian government.

 

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