The Chartered Institute of Logistics and Transport (CILT) Nigeria has called on the federal government to consider giving financial assistance to the Nigerian airline operators as bailout to enable them cushion the effect of the lockdown on the industry as a result of the Coronavirus pandemic.
The National Executive Director, CILT Nigeria, Mr. Paul Ndibe who made the submission in an interview with our correspondent in Lagos recently argued that if government could give bailout to states immediately after the general elections in 2015 to enable them discharge their responsibilities to their workforce, such gesture should also be extended to the indigenous airline operators since it is still Nigerians that are working in those airlines.
Ndibe contended that for these airlines to have those staff working for them, they were helping to boost the Nigerian economy.
He therefore posited that government should integrate them into the package and still support them to a point that they could take off the responsibility of the staff salaries provided that they would now become lean in terms of the staff they would maintain.
According to him,” Just like the government is paying its own staff that have not worked this period, they can support the airlines to the point that they can take off the effect of the losses they will incur in terms of the emolument of their staff, allow them to now source for fund to do their normal refinancing or servicing of the airplanes or getting their license.
“Think of the maritime sector, some of the seafarers whose licenses would have expired, NIMASA waved that condition in order to accommodate the time for them to renew their licenses on account of the lockdown. Similarly, the International Civil Aviation Authority can also look into that or even NCAA can look into that and either they reduce or they wave the licenses these airlines would have paid in order to enable them use those fees to take care of their staff salaries, for government to directly help them in terms of paying their staff salaries which they can also arrange and pay back to the government as they operate.”
He observed that the Aviation sector is a peculiar sector in the sense that virtually all the operators in the Aviation sector are private sector entrepreneurs adding that many of them are struggling with few planes that they are operating and then this happened.
“You see, it is difficult to explain the pains of most business owners during this period on account of losses not necessarily in terms of revenue losses but in terms of standard costs that they need to incur. I give you an example, for the airline operators, their standard repairs, examination they need to conduct on their airplanes over a period of time whether or not they fly those aircrafts. For those who are acquiring new airplanes, there are standard hours of flight they must undertake before they can start carrying passengers and these are standard costs that they need to incur and those costs are heavy.
“So, for airline operators whose aircrafts are due maybe for C-check or particular examination and then there is Covid-19 and it has not been able to fly well enough to generate the revenue to underwrite the costs for those examinations, those planes cannot take off because the regulatory agency will not allow that. So, what will the operator do?
“So, he or she will need to look for how to finance or refinance his operations. So, in the minds of the operators, they are thinking of how they can remain afloat not necessarily on the labour. What we are saying is not necessarily transferring the burden but prioritizing their expense sub head to know which one that can make them remain afloat. There standard costs that they will also pay. They are paying for their offices, rented accommodation which is also standard whether or not they operate and even many other costs they need to incur, as far as they are concerned, they will maintain their names and their licenses and those license whether you fly or not, you must renew them at the due date.
“So, these are standard costs that they must have to integrate into their expenditure and if revenue is not coming, they will prioritize these expenditures. If the money they have can only allow them fly one or two aircrafts, they will do that and maintain a lean number of staff that can support that service until they are able to bounce back and that is why in many countries, their governments are helping them and giving them loans to enable them stabilize for this initial period. Nigerian government can also do the same”, he submitted.
Photo: National Executive Director, CILT Nigeria, Mr. Paul Ndibe.
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