Airlines Owe Aviation Agencies N22. 2bn, Says Sirika

Minister of State for Aviation, Senator Hadi Sirika

•House committee seeks suspension of airports’ concession
•FG to start disbursement of N5bn bailout

Deji Elumoye, Adedayo Akinwale in Abuja and Chinedu Eze in Lagos

The Minister of Aviation, Senator Hadi Sirika, yesterday put the debts of Nigerian airlines over the last 10 years to aviation agencies at about N22.2 billion.

Sirika also said the federal government would soon start the disbursement of the N5 billion bailout it approved for the operators of the aviation sector.

The House of Representatives, however, directed the Ministry of Aviation to suspend the planned ceding of four airports to private investors, pending the resolution of the contentious issues raised by labour unions and other stakeholders.

Sirika spoke in Abuja at a public hearing on the Civil Aviation Amendment bills by the National Assembly, which would modernise and make the country’s aviation industry, be in tandem with international best practices.

The minister explained that the domestic carriers owe the agencies $6.9 million and N19.6 billion respectively and lamented their inability to pay their bills to the agencies, including five per cent charge from the Nigerian Civil Aviation Authority (NCAA), passenger service charge, landing and parking fees to the Federal Airports Authority of Nigeria (FAAN) and overflight charges to the National Airspace Management Agency (NAMA).

The public hearing, organised by the Senate, is the first leg of the hearing by the National Assembly for the amendment of the Civil Aviation Amendment bills and that of other agencies in the aviation industry.

Sirika made the disclosure of the debts in response to the request by the Chairman of the Senate Committee on Aviation, Senator Smart Adeyemi, who canvassed for bailout fund for the airlines to save them from bankruptcy.

Sirika stated that the federal government would soon start the disbursement of the N5 billion bailout it approved for the operators of the aviation sector.

He said the airline operators would get N4 billion while other businesses in the aviation sector would be given N1 billion.

“The federal government has approved N4 billion as a bailout for the airlines and N1 billion for other businesses within civil aviation.

“We are already putting arrangements for the disbursement in place and once we start, it would be transparently done,” he added.

However, Adeyemi, said the N4 billion would not be enough to keep the airline operators in the business.

He added that the fortunes of airlines globally have degenerated because of the COVID-19 pandemic and the Nigerian carriers are not left out.

According to him, other countries have given huge bailout funds to their airlines in order to sustain their operations and retain their manpower.

Also, Adeyemi, in his welcome address, said the public hearing was important in order to encourage the quality and content of the bills, ensure economic growth, improved job creation, provision of Maintenance, Repair and Overhaul (MRO) facilities and safety of the industry.

He noted that without the review of the Civil Aviation Acts, the policy of the government to implement the master plan for the sector would not be achieved, while the nation’s aviation industry would continue to lag behind.

He warned that if the challenges of the indigenous airlines were not urgently addressed by the government, most of the carriers may close shop soon and called on Sirika to ensure increment in the palliative funds approved for the carriers.

“Let’s look at the cost of spare parts for the airlines and duties that they perform. Though we might argue that the business is a private one, it is centred around safety. “The N4 billion approved for the airlines by the federal government is too little to make an impact on the operations of the airlines,” he said.

The six aviation agencies, which their Acts are being amended or repealed, are the Nigerian Civil Aviation Authority (NCAA) Act, the Federal Airport Authority of Nigeria (FAAN) Act, the Nigerian Airspace Management Agency (NAMA) Act, the Nigerian Meteorological Agency (NIMET) Act, the Nigerian College of Aviation Technology (NCAT) Act and the Accident Investigation Bureau (AIB).

Speaking at the public hearing, the Senate President, Dr. Ahmad Lawan, said the issues to be addressed in the bills were sufficient enough to ensure safe travel and enhance security in the Nigerian aviation industry.

The NCAA Director-General, Capt. Musa Nuhu, in his presentation, said the agency was supposed to be the only regulatory body in the country.

He, however, said some of the service providers in the aviation agencies, such as the Federal Airports Authority of Nigeria Act, 1995 and the Nigerian Airspace Management Act, 1999, gave them regulatory powers, contrary to the recommended practices of ICAO, which required only the Civil Aviation Authority (CAA) of every ICAO member state to act as the only autonomous regulator of civil aviation in the member state.

He explained that the findings of FAA Category 1 Certification Audit of Nigeria, conducted in 2010 and ICAO audit recommended that Nigeria should take corrective actions to address the finding by amending the establishment laws, to remove regulatory powers from service provider agencies, which Nigeria accepted.

Meanwhile, the House of Representatives has directed the Ministry of Aviation to suspend the planned ceding of four airports to private investors pending the resolution of the contentious issues raised by the unions and other stakeholders.

The federal government recently announced that it has commenced the concession process for four new international airport terminals, comprising Lagos, Abuja, Port Harcourt and Kano.

The House Committee on Aviation gave the directive to halt the concession process yesterday in Abuja following the refusal of Sirika to appear before it and clear grey areas as regards the planned concession of the four airports.
The Permanent Secretary of the ministry, Mr. Hassan Musa, had told the committee that the minister could not make it because he was attending a public hearing on a bill at the Senate.

However, the excuse did not go down well with the members of the committee who said the minister deliberately refused to appear despite the seriousness of the issue.

The committee also said the minister, even though he was a former lawmaker, has no regard for the committee.

The committee suspended all actions concerning the concession until the minister appears before it.

The Chairman of the committee, Hon. Nnolim Nnaji, said everybody was aware of the impact of COVID-19 on the aviation sector, which he said would take a while for the industry to recover, hence, the need for the committee to strive to do whatever is necessary to help stabilise the sector.

Nnaji stated: “Based on the outcome of the meeting with the labour unions, the committee invited the Minister of Aviation and the heads of agencies under him to discuss the issue of the airports’ concession. Several dates were fixed for the meeting but for one reason or the other, they failed to attend.

“The committee had also received several letters from stakeholders both in favour and against the airports’ concession. In view of this, the House of Representatives Committee on Aviation hereby requests that the concession of the four airports should be put on hold pending the resolution of the contentious issues raised by the unions and other stakeholders to avoid industrial actions that may further cripple the already distressed industry.

“We are hopeful that at the end of the day, our intervention would provide opportunity for all the parties to reach a common ground that will move the aviation industry forward.”