The House of Representatives Committee on Aviation, has asked for a N50 billion intervention fund for the local airlines, in order to prevent the aviation sector from imminent collapse.
Addressing journalists on Monday, the committee through its Chairman, Hon. Nnolim Nnaji, said “The federal government’s N4 billion bailout to the airlines and some palliatives to the agencies (not yet released) is too small. The Airlines needs at least N50bn bailout funds to cushion the Coronavirus effect”.
The lawmaker disclosed that just concluded public hearing on some amendment Bills for the review of some aspects of the civil aviation Acts, organised by the committee “has brought to the fore the impending crisis in the aviation industry which requires urgent attention. The industry is in dire need of urgent intervention to save it from imminent collapse. There is no gain saying that aviation is the bedrock of the national economy”.
He said the committee’s interaction with airline operators has shown that the challenges which a crippling their operations include; Non implementation of the Executive Order on Zero Customs Duty and Zero VAT on Importation of Commercial Aircraft and Aircraft Spare Parts, Non implementation of the Executive Order on the Removal of VAT from Air Transportation, Inability to Access Forex, High cost of capital and lack of single digit lending interest rate for airlines.
Others, they said, were replacement of NCAA’s 5% Ticket Sales Charge (TSC) with a Fixed charge similar to FAAN Passenger Service Charge (PSC), Multiplicity of Taxes, Fees and Charges.
“It is important to note that aviation industry is regarded as a strategic industry, not only for its potential for economic growth but also for its crucial role in national development and regional integration…Unfortunately, this vital sector that acts as stimulus to the rest of the sectors of the economy is facing extinction, the consequence of which will be very detrimental to the overall economy of the country if not squarely addressed immediately”, the lawmaker stated.
He recalled that before the outbreak of COVlD-19, the industry, especially the airlines were already crying for intervention from the government to help them surmount the various challenges confronting them. “The public hearing we held for the 6 aviation Bills between November 17 and 19 provided the ample opportunity for the indigenous airline operators to voice out their problems, which we believe should not be treated with levity”, he said.
