Aviation analyst and the chief executive officer, CEO of Belujane Konzult, Mr. Chris Aligbe has raised alarm on the impending collapse of the aviation industry over the severe impact of coronavirus (Covid-19) pandemic.
Aligbe said this was as a result of the travel restriction which was imposed globally as a measure to contain the covid-19 pandemic.
Aligbe in a chat with newsmen said the entire spectrum of the industry – the aviation agencies, the airlines, the handling companies and other aviation allied support service providers – are reeling from the impact of the coronavirus induced shutdown.
To get the industry back on its feet after the coronavirus pandemic, he advocated for allocations to agencies like the Federal Airports Authority of Nigeria (FAAN) which depends on the flights to generate revenues to run the 22 airports under its purview.
According to Aligbe, with the suspension of flights by both domestic and foreign airlines, FAAN revenue base, both aeronautical and non-aeronautical revenue, has disappeared.
He also said for airlines to remain alive after the pandemic, government must support them with grants to stay afloat and keep people in their employ.
He said though the airlines as well as handling companies like the Nigerian Aviation Handling Company (NAHCo) and the Skyway Aviation Handling Company (SAHCO) are private businesses, they contribute to GDP with the employment they create and the taxes they pay.
He noted that just like FAAN, the Nigeria Air Space Management Agency (NAMA), the Nigerian Civil Aviation Authority (NCAA), the Accident Investigation Bureau (AIB) as well as the Nigeria College of Aviation Technology (NCAT) need some lifeline to survive the covid-19 crisis.
Aligbe said NAMA which depends on overflight charges, air route charges to sustain its operation is suffering because there are no flights.
He said, “Every aspect of the industry is impacted particularly because the revenues in the industry depend on the flights whether it is aeronautical or non-aeronautical. The more flights you have into an airport, the more likely businesses will develop around the airport.
“The main revenue generation, the passenger sale charge (PSC), the ticket sale charge (TSC), that is the main revenue that is generated and shared among the parastatals particularly like the regulatory body that does not engage in business like the AIB and NIMET though NIMET engages in business limitedly.
“But FAAN (the Federal Airports Authority of Nigeria) engages in business and its business is dependent on a lot of flights that come in; the landing and parking charges, the rentals, and all other businesses whether you are talking about airport charges, whether you are talking about toll gate charges, duty free shops or eateries, restaurants, it all depends on whether the people are coming, it depends on the travelling passengers and more importantly it depends on meeters and greeters.
“Now FAAN cannot get that because flights are not coming, all businesses are shut down and more importantly on the side of FAAN, they are losing both aeronautical and non-aeronautical revenues. They have lost it and there is no other place for them to generate any fund.
“Why the case of FAAN is very severe is because they must serve people to run the airports. People must be at the airports, the AVSEC (Aviation Security) personnel must be there, people would be there to maintain the airports to ensure the facilities don’t wear out. Where would they generate the money? And they don’t receive annual budgetary subvention. So something seriously has to be done, not just FAAN, I just used FAAN because its case is very severe. The same thing happens to NAMA. NAMA generates funds from overflights, air route charges, it cannot now, there are no overflight charges now, not much of air route charges, air planes are not flying, most countries of the world are shut down.”
Aligbe said for the airline, a loan of less than five per cent payable in 15-20 years must be made available.
Despite the intervention, he averred that it would take them two years to bounce back and be able to expand.
He said within this period, government can push the national carrier project to be able to generate employment in the aviation industry immediately after the Covid-19 pandemic.
“Coronavirus will come and go, the industry will have to, not just continue, but the industry will have to grow, it should not be left to stagnate. If the industry stagnates, its contributions to economy will stop.
“This is why I will come to the point people have talked over time about national carrier and all those things. Yes government doesn’t have money but luckily what is being programmed is not a government-funded or government-owned national carrier. Government is just to put in something to kick-start it. But in a situation where government says, ‘we can’t make budgetary allocation for this’, for the airlines including the existing domestic airlines and the programmed national carrier, let there be a loanable fund, an intervention fund, soft loan of very low single-digit interest rate and long term – between 10 and 15 years maximum to be provided by the Central Bank.”
