No Nigerian Airline Can Survive With 25% Interest Payment On Loan – Fmr MD Nigeria Airways
The former Managing Director of the defunct national carrier, Nigeria Airways Mr. Yomi Jones, has said that with the current 25 per cent repayment on loans by the Nigerian carriers, none of them can compete with the foreign carriers.
Jones also charged the Federal Government through the Ministry of Aviation to reverse the policy of multiple entry points to foreign carriers, saying it was killing their businesses.
Speaking at the Q1 2022 Breakfast Business Meeting organised by the Aviation Round Table (ART) with the theme: ‘Economic Implications of Multiple Entry Points by Foreign Airlines into Nigeria,’ in Lagos, recently, Jones insisted that with the current environment, no Nigerian airline could survive in the terrain.
Jones emphasised that it was necessary for the government to renegotiate the Bilateral Air Service Agreement (BASA) arrangements it has with foreign countries, recalling that in the days of the defunct national carrier, Nigeria Airways, funds accrued from BASA were being used by the airline for developmental projects.
He said: “Multiple designations to foreign airlines is not too good for our development, especially the local carriers. Nigeria is now killing Nigerian carriers with its policy of multiple entries for foreign airlines. The National Assembly members can take a look at this policy.
“We need the support of the airlines for the domestic airlines to grow. How many banks in Nigeria today can fund the acquisition of an Embraer aircraft that some of our airlines are buying now? In those days when we gave the foreign airlines multiple designations into Nigeria, they were paying royalties and then, we made a lot of money from it, but now that has been cancelled by the government.”
He insisted that the Federal Government needed to revisit the issue of multiple entries for foreign airlines before the birth of a new national carrier for the country.
Jones explained that the country needed a big and a strong national carrier to fly its flag around the world, maintaining that the aviation industry is technology, capital and labour intensives.
Mr. Andrew Okunuga, a member of AON, warned that if the government continued with this approach, the indigenous airlines would close shop very soon.
Okunuga also insisted that the lifespan of the planned national carrier, Nigeria Air may also be short-lived.
“It is not for the foreign airlines to decide the routes they want to fly into in Nigeria. However, these foreign airlines don’t just come in, but they get approvals from the government. I hope our new national carrier won’t be killed by this act of the government,” he added.
Besides, Dr. Gabriel Olowo, the President of ART, decried that foreign airlines are gradually taking over the domestic markets with continuous approvals for multiple entries by the government.
“The damage of multiple entries into Nigeria is huge. Britain for instance has 21 flights into Nigeria weekly. European Unions have 43 frequencies every week into Nigeria. Also the Middle East has 56 flights weekly into multiple entries into Nigeria.
“As it is today, we have zero participation in the international sector as an industry and the domestic sector is eroded through multiple entries into Nigeria.”
Olowo in his statistics stated that of all the task recommendations arising from its previous breakfast business meetings, only 6 per cent had been addressed by the government, while 48 per cent remained undone and another 46 per cent were ongoing.
He pointed out that the total staff of all the foreign airlines operating into Nigeria is less than 400 despite the huge financial gains from the country.
