Worried by the financial crises rocking Nigerian airlines, the Central Bank of Nigeria (CBN) is working out modalities to rescue the carriers by...

 

Worried by the financial crises rocking Nigerian airlines, the Central Bank of Nigeria (CBN) is working out modalities to rescue the carriers by way of ensuring that they access loans at low interest rates.

To that effect, the apex bank met last week with three aircraft manufacturers- Boeing Company, ATR and Embraer which made presentations on how they can assist the country’s ailing airlines.

At the meeting with the CBN governor, Sanusi Lamido Sanusi in Abuja, were representatives of Aero, Arik, Chanchangi, Overland, IRS, Medview Airlines, their chief executives, the aircraft manufacturers, and representatives of the Asset Management Company of Nigeria (AMCON).

About four airlines have reportedly been taken over by AMCON due to huge debts amounting to over N120 billion.

The Federal Government through the CBN is working on how to assist the carriers acquire new aircrafts at a single digit interest rate, a departure from the past where airlines were made to pay 30 per cent interest on loans from banks.

 

This time around, airlines which qualify for assistance would be expected to pay seven per cent interest on loans secured.

 

 The bail-out period for the airplanes acquired through the programme would be for 15 years at the minimum interest rate of seven per cent as against short term loan at two digit interest rates.

 

With the exception of a start-up airline, Medview, the books of virtually all Nigerian airlines are in red, a situation that has made them economically unhealthy. The situation has equally stunted their growth and expansion.

 

A top official of an airline who was at the meeting but pleaded anonymity said as he is not authorized to speak on the issue, said the CBN boss insisted that three airlines, including one of the biggest ones in the country must effect a change in its management before it could benefit from the fresh intervention being proposed by the Federal Government. But the proposal did not go down well with the chairman of the airline as revealed.

 

Sanusi, according to the source, was also said to be irked with the running of a particular carrier with a base in Kaduna, noting that the only way out for the airline to be rescued was to re-organize its management and come up with a good business plan for profitability.

Speaking in the same vein, the Managing Director of Medview Airlines, Bankole Munir lauded the efforts of the Minister of Aviation, Stella Oduah-Ogiewonyi, adding that what she was offering the airlines was a total package which would allow them have direct facilities in Nigeria.

Munir said that rather than give aviation intervention fund to individuals, government was purchasing aircraft to service the regional hub and launch interconnectivity and to reach every corridors of this country.

He confirmed that government had given window to three aircraft makers- Boeing, ATR, and Embraer which presentations he said were satisfactory.

 

The airline chief lamented the costs of operations in the sector, stressing that the Nigerian Airspace Management Agency (NAMA), the Federal Airports Authority of Nigeria (FAAN), the Nigerian Civil Aviation Authority (NCAA) and other agencies should be co-opted into the cost effectiveness of the airlines.

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