Fed Govt mulls discount for local airlines’ debts to FAAN, others
The Minister of Aviation and Aerospace Development, Festus Keyamo has disclosed plans by the Federal Government to grant domestic airlines discount on debts currently owed aviation agencies. The Minister said
- Airlines seek total waiver of debts owed, calls for action against oil marketers
The Minister of Aviation and Aerospace Development, Festus Keyamo has disclosed plans by the Federal Government to grant domestic airlines discount on debts currently owed aviation agencies.
The Minister said the percentage of the discount would be decided by President Bola Tinubu who directed him to submit a request to him on Thursday for immediate action.
Keyamo also revealed that the President would set up a committee to review levies and taxes on tickets.
The Minister disclosed this after a meeting with Airline Operators of Nigeria (AON) and other stakeholders following plans by the AON to suspend flight operations and increase airfares due to the high cost of Jet A1 fuel.
Speaking on plans to address the situation, Keyamo said: “Before this meeting, I had the privilege of meeting Mr. President to brief him about the meeting and he mandated us to quickly bring a request to him, a formal request in writing, first thing tomorrow morning.
“The request he will consider and grant is a generous discount on the debts the airlines are owing the aviation agencies like the Nigeria Airspace Management Agency (NAMA) Federal Airports Authority of Nigeria (FAAN), and the Nigeria Civil Aviation Authority (NCAA).
“So Mr. President, specifically told me not to wait for a council memo, he said I should bring the letter to him as early as possible tomorrow. The percentage of discounts would be decided by Mr. President because he is so concerned about what is happening.
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“The second request Mr. President has asked that we should bring for him to fully consider and grant is that he wants to set up a committee to address the issues of levies, taxes and fees on domestic tickets once and for all. This request has been on for a long time. So Mr. President will put the team together and he will give them a deadline to report to him as quickly as possible on the government fees, charges and levies that we can take off domestic tickets for now to give respite to Nigerians who are also buying tickets”.
He added that the President will also consider a date for the airline operators to meet with him for more robust discussions regarding access to capital.
The Minister of State for Petroleum (Oil), Heineken Lokpobiri who was represented by the Permanent Secretary of Ministry, Mrs. Patience Onyekunle said a meeting would be held with oil marketers on Thursday to address the issue of pricing.
She said: “At this point, since this is an urgent matter on the table, there is the suggestion and the agreement that the marketers will be invited here tomorrow for us to continue this deliberation.
“Hopefully, come tomorrow (Thursday), we would have some of these issues resolved. So that is where we are from the side of the Ministry of Petroleum Resources. So we will get the marketers to engage them and also hear them.”
Speaking on behalf of AON, the CEO of Air Peace, Allen Onyema sought a total waiver of all debts owed airlines.
The AON also urged President Tinubu to put measures in place to fund the Bank of Industry to enable airlines operate effectively.
The operators also called for an action against oil marketers, noting that the increment of oil price by over 300 per cent was not the standard practice globally.
Onyema said: “The standard is, if crude oil rises by 10 per cent, the by-product of crude oil should rise by a proportionate rise in the pricing, but in Nigeria, after the Strait of Hormuz blockade, Nigeria increased by about 300 per cent, and the airlines are bleeding.
“We threatened to shut down, not because we wanted to shut down, but because we had no money anymore and we cannot continue to borrow money from the banks just to pay for fuel and neglecting other things that are supposed to be done in the industry.
“So, we decided that instead of not having money to do other things like maintenance, we needed to shut down and when the Minister begged us, it didn’t take us a second to obey that plea, because this government has really helped the airlines and the aviation industry more than any since 1960.
“We appreciate Mr. President for coming to our rescue, but we want to say that instead of the President to decide which discount to give us, we are asking for a total waiver, because airlines are asking for a total waiver of all the debts we owe, and at the same time, a suspension of further payment until Strait of Hormuz is open.
“We want to also ask Mr. President to intervene on the cost of acquisition of funding for airlines. All over the world, they acquire at 3 per cent but in Nigeria, we acquire at 30 to 35 per cent. It is killing and that is why airlines owe FAAN, NCAA and other.
“It’s not a lucrative business. So we ask Mr. President to please fund Bank of Industry because that is the only bank that is still doing single-digit or at least 10 per cent interest to airlines, but they don’t have funds now.
“Mr. President should please help us to fund the Bank of Industry very well because that is another way of helping us in the long run and permanently.”
On the action of the marketers, he said: “We appreciate this government for efforts made but the truth is that the marketers must be brought to book to explain how they got about the 300 percent increase, when even Dangote is even surprised, because what he’s selling to us is that he still remains the cheapest, and some of them lifted from there. So why the astronomical rise?”
