As the federal government contemplates bailout package for the local airline industry in order to prevent their collapse due to the coronavirus pandemic, aviation analyst and consultant, Group Capt. John Ojikutu (retd) has advised the government to exclude carriers that are indebted to the aviation agencies before the lockdown and those that are in receivership of the Asset Management Corporation of Nigeria (AMCON).
It would be recalled that the country’s airspace was closed for scheduled operations on March 23, extended for a month on May 6 and a possible resumption on June 21 with the approval of five international airports for resumption of domestic operations.
The idea of a bailout was mooted by the director general of the Nigerian Civil Aviation Authority (NCAA) Capt. Musa Nuhu during the ‘Flying into turbulent skies’ web conference on May 21 that the assistance would extend to agencies and ground handling companies.
Earlier on May 4, the minister of state for budget and national planning, Mr. Clem Agba, told a web conference that the federal government was looking at ways of supporting the aviation sector.
He said the grounding of aircraft caused monthly losses of nearly N21 billion and “we are looking at how to provide some form of bailout support to ensure that the industry doesn’t die.”
But Ojikutu said the only government direct financial intervention may be necessary as palliatives for airlines’ staff salaries only for three months or the period the lockdown lasted “but this must be recoverable within 12 months or by June 2021.”
He also said financial palliative should be used to pay only 70 per cent of the staff salaries adding that “those staff must be confirmed to have been registered with the national pension board and their pension contributions are up to date.”
He said the balance of 30 per cent in their salaries not added should account for the period they did not pay for transport to go to work..
“While I do not know the provisions of the current federal government civil service regulations, you may wish to use the appropriate service rules to consider Palliatives for the staff of the government services providers.
“Avoid fiscal monies for the private operators and don’t include those that are indebted to the government services providers before the operations lockdown or those that are in receivership of AMCON,” Ojikutu added.
Nevertheless, he advised the federal government to grant the domestic airline operators free airport landing and parking and air navigational charges for not more than three months for domestic airlines only after the easing of lockdown on operations;
*50 per cent passenger service charge discount for three months on all domestic passengers only;
*gradual charges reversal and the incremental of all the service charges to 50 per cent of the normal in the next three months to all services provided by the government service providers;
*75 per cent of the normal charges to be collected three months following the gradual charges reversal;
*revert PSC to 100 per cent after the first 90 days’ concession.
Following fees/charges reversion to the normal after 12 months, Ojikutu advocated for the classification of federal airports into CAT A to D for appropriate services changes
He said CAT A1 airports with annual passenger traffic of 5 million or more should attract 100 per cent charge;
*CAT B: passenger traffic of one to 5 million – 75 per cent charge;
*CAT C: airports with passenger traffic of 200,000 to 1, 000, 000 – 50 per cent charge and CAT D airports below 200,000 passenger traffic, 25 per cent charge.
He also said the government could use the same templates, if necessary, for other aviation private operators mainly the airlines and ground handlers like the Nigerian Aviation Handling Company PLC (nacho aviance) and Skyway Aviation Handling Company Plc (SAHCO).
