Analysts urge Investigation into N200bn Airlines’ Intervention Fund

Moved by the manner airlines and aviation agencies stirred controversies over debt overhang in the sector, analysts at the weekend asked the incoming government of Muhammadu Buhari to investigate the N200 billion intervention fund that had gone into the sector in the past few years.

They advised the government to stop releasing funds for airlines’ bailout.

The analysts said that most of the airlines could not give full account of what they did with the funds they accessed from the N200 billion bailout given by the outgoing government, explaining that “because nobody monitored the implementation, many of them used the money on things they were not meant for.”

Part of what they were supposed to use the money for was to settle bank loans which had weighed down the operations of the airlines, shrinking their number to three.

Already, the airlines are in tangle with aviation authorities as their debt had exceeded N5 billion. This is different from their indebtedness to marketers and other supply companies.

“And yet their debt profile keeps rising because they are not disciplined. The Nigerian Civil Aviation Authority (NCAA) has not been auditing their books and many of them are not supposed to be in airline business because they are not prudent,” John Ojikutu, a consultant to the International Civil Aviation Authority, said.

“How can government allow an airline access N35 billion from the funds and then owe staff several months of salaries, sack them and wind up the airline without anybody question Developing the management for three years now,” he asked.

“As at today, Nigeria has recorded close to 20 failed domestic airlines in the last four decades due to carefree attitudes”, he lamented.

Ojikutu noted that within a year in the life span of this present administration, government through the Ministry of Aviation has intervened in the sector with about N200 billion from the Central Bank of Nigeria through the Bank of Industry to bail out private airline operators from debts and bank loans. It has taken about $60 million or N10 billion from the Bilateral Air Services Agreement funds for the remodelling of some airports and has borrowed yet $500 million or N80 billion from China, allegedly to buy aircraft to establish a national carrier which it planned to handover, including the remodelled airport terminal buildings, to private individuals who are mainly government sponsored investors and who are not well grounded in aviation management and operations.

“It would, however, be appropriate for the incoming government to assess and review the civil aviation transformation programme of the present administration which has expended well over N200 billion by way of intervention in two years on both public and private operators in the sector,” he summed.

Shehu Iyal, former senior special assistant to President Goodluck Jonathan on aviation, disclosed that Aero got N20 billion, Arik Air accessed N15 billion, Kabo Air, N6.66 billion and Chanchangi Airlines, N3.4 billion. Others are Dana Air, N618 million, Caverton Helicopters, N1.348 billion, Overland Airways, N805 million and FirstNation Airways N271.7 million, apart from others which are still accessing.