Fred Itua, Abuja
The Senate on Monday, raised the alarm over an imminent air mishap in the country due to inability of operators to put their aircrafts in good shape.
It consequently urged the federal government to urgently intervene with N50million bailouts to the Airliners as against the paltry N4billion being offered.
Painting the gloomy picture of the Aviation Sector at a press briefing , the Chairman, Senate Committee on Aviation, Smart Adeyemi, said airline operators in the country are broke and badly in need of bailouts to prevent them from cutting corners.
According to him , Aviation sector is very critical to the economy of any nation and highly capital intensive which make Governments across the globe to give bailouts to operators from time to time .
He cited example of Senegal that recently gave $74million bailout to the sector in the country , Rwanda $150million and United States of America ( USA) $58billion .
Aside the $50billion bailout, Adeyemi also disclosed to Journalists that many of the Airline operators confided in the committee that issues such as custom taxes on imported spare parts of aircrafts, multiple form of taxations and VAT on Air transportation , are running them out of business and tempting them to cut corners .
“Operational challenges running down their businesses as confided in the Aviation Committee are non compliance of the custom department with the executive order to waive any form of taxation on importation of spare parts and commercial aircrafts.
“Non compliance of the executive order on the removal of Value added tax (VAT) from air transport.
“The inability of the airline operators to have access to single digit lending as obtainable in other parts of the world.
“The inability of the airline operators to access foreign exchange as and at when due to enable them pay the value added tax for their aircrafts,” he said .
He added that though the federal government due to COVID-19 pandemic adverse effects on the sector , planned to give out N4billion bailout but based on comprehensive assessment of the pathetic situation at hand , not less than N50billion is required for such intervention .
His words: “You would recall that the federal government, haven considered impacts of the pandemic on the aviation industry, with a view to maintaining smooth operations, made the sum of N4 billion naira available as a bailout to these airline operators.
“With further and more critical intervention with airline operators in Nigeria, we gathered that approximately N50 billion Naira will be required to meet the requirements of airline operators.
“This increase in bail fund is imperative if we are to keep our economy running, guaranty job security and mitigate against retrenchment.
“A critical look at the aviation industry in Africa, Senagal for instance which is no competition for the Nigerian Aviation industry in terms of number of airline operators etc, released a sum of $74 million dollars as bail out funds for their Airline Operators. Rwanda also released $150 million dollars for its airline operators.
“Taking the scope out of Africa, America for instance released the sum of $58 billion dollars as bailout funds for its airline operators. This is to mention a few.
“If comparative analysis ‘is anything to go by, it is clear that the N4 billion naira announced by the Federal Government as bailout funds for airline operators will not be sufficient to sustain three (3) of the needs of the fifteen (15) scheduled flight operators, save the non scheduled operators.
“Our further enquiry has also shown that airline operators are already discouraged and have resorted to cutting corners in carrying out maintenance requirements on their aircrafts.
“This is of course as a result of their poor financial situation. If this is not immediately checked, the effect is best imagined than experienced .
“As duly elected representatives of the people, we are mandated to take seriously any issues which may have adverse effects on the lives of the people we represent. Where we see red flags, we should immediately bring this to the attention of the people and ultimately, the Federal Government.
“It is important to note that the safety recorded so far in the aviation industry in Nigeria is primarily due to the availability of the spare parts, and a conducive atmosphere to operate.
” Let us note that no amount of money is worth the life of even ONE NIGERIAN and it’s on this note that we call the immediate and urgent attention of the Federal Government on the need for the increase on bailout funds for air line operators.”