Arik CEO appeals to FG for more funds injection, foreign exchange availability for airline
CHIEF Executive Officer (CEO) of Arik Air, Captain Roy Ilegbodu has made a passionate appeal to government for the injection of massive funds to airlines as well as aid them with availability of foreign exchange which went up 40% since Covid-19 increasing airlines cost by same.
This is just as he has said that the N4 billion given to the airline component of the aviation chain was a far cry to what was expected giving the huge challenges airlines have had to grapple with from forex unavailability to maintenance cost, increase in jet fuel and low passenger numbers.
Captain Ilegbodu who made the appeal at Arik Aviation Centre explained that the funds airlines got as Covid-19 palliatives was y not enough given the impact of the pandemic and the challenges the airlines have had to deal with especially in the area of forex.
On the COVID-19 palliatives he said, “What I would say is that what we got was definitely not enough. We certainly could have done with a lot more. The impact of the pandemic has been quite significant as you follow news from all around the world you see that it is the same situation everywhere. Governments have come massively in support of airlines so we did expect a bit more from government, however, that said, we also understand that government itself faces significant challenges from all other sectors of the economy.
“Therefore we do not think of ourselves as unique. So we appreciate the little we got something little is better than nothing, so I think that helped in its own little way aiding us to surmount some of the challenges we face.
He went on,” We still face significant challenges going forward, we are still grappling with them and more so to issues in play, we have challenges of foreign exchange that is one big issue. The exchange rates have virtually gone up significantly by approximately 40% since COVID struck. You realize that our industry itself is quite tied to the supply from outside Nigeria.
“To support an aircraft with spare parts you need all sorts coming in. So significant sums of monies are spent on maintenance, the airplane on a daily basis must be maintained, you can’t compromise maintenance of aircraft. The tires on an airplane, some people don’t realize how much we change those tires, you can’t you an aircraft tire for example the way you use your car tires till they get burst. You have to change them regularly whether they look old or not.
“So you see that happening on daily basis because of some of the rotables. It’s quite significant for us to face all this and now coupled with the exchange rate, so we do need more help from government. As much as government cam give, we will appreciate, especially if that can be resolved (Foreign exchange) that major aspect for us.”
He explained that passenger traffic has gone low and some airlines may not have noticed because even capacity to service the passengers was not available as most airlines have downsized their fleet.
“Passengers are not really travelling as much as before, we’ve seen that. However, some airlines may not notice that now because that is because the capacity has also dwindled. What I mean by that is that the airlines have suffered so much that the fleet sizes have gone down; therefore normally you not notice that passenger numbers have dwindled but as airlines start to recover, it will become apparent that people are no longer travelling as much as they used to do pre-COVID.
“But they good news is that the vaccines are here and so it gives everyone hope, I do expect that in the next couple of months there will be a lot more movement and things will start to come back to normal,” he said.
On fund injection, the Arik CEO explained that the entire industry is in a situation were significant sums of money need to e injected into the system to assist.
According to him, the US airlines even not flying at full capacity, was supported with government funding
He said it was important to make government aware that an airline itself to a nation is not necessarily about an airline, as most airlines will not be profitable apart the so- called Low Cost carriers but when you take the entire network of services they provide overall contribution to the GDP of any country is very critical
He explained, “I think the entire industry is in a situation were significant sums of money need to e injected into the system to assist. The US airlines even not flying at full capacity, government has supported them with funding, that is important, to make government aware that an airline itself to a nation is not necessarily about an airline, most airlines will not be profitable apart the so- called Low Cost carriers but when you take the entire network of services they provide as a portfolio, hotel chains, other support services on ground, ground handling and all that are profitable because the airline exist, that overall contribution to the GDP of any country is very critical, that is why government should have its eyes when looking at an airline, how does the airline contribute to the economy.
“These vaccines for Covid, I’m sure they all came by air. So many things, you can’t quantify them, just take so many service providers, SAHCOL, NAHCO, airports facilities, MM2, forget about the staff, that effect of the entire system is very important. So those nations that realize that, take advantage to make sure that the airlines exist. It keeps the economy going, tourism all sorts.
He added,” If you go to Ethiopia, the country is centered on aviation, they built one of the biggest hotels in Africa as an airline, they’ve taken over the terminal fully, you can see what they are doing, they are actually taking care of cargo transportation in and out of their country. They have a huge network, they may not necessarily have a robust domestic network like us here but I think their global network is quite interesting.
“Until government becomes aware or that someone is able to say this is what the airlines contribute to the economy, until that is clear, that is when they will see why you need to keep the airlines alive.,” he said.
