COVID-19: Nigerian Airlines In Need Of Bailout To Survive, Prevent Mass Sacking

In order for Nigerian airline companies to retain jobs in the aviation sector following the shutdown of flights due to COVID-19, the Asset Management Corporation of Nigeria (AMCON), has requested that the Federal Government offer them financial relief or bailout.

The demand was made by the Executive Director of AMCON's aviation portfolio operations, Aminu Ismail. He said offering the domestic airlines loans will aid their growth and expand their fleet. Ismail also stated that the loan relief will enable the airline firms create jobs and prevent downsizing in the industry.

AllNews had reported that the aviation sector was one of the most affected businesses in Nigeria following the lockdown which was prompted by the COVID-19 outbreak in Nigeria; Air Peace, Dana, Arik, others have since shut down operation. The aviation industry is still under lockdown despite the reopening of other sectors.

The lockdown had already compelled most airlines to slash salary and cut jobs globally as a restriction on flight movement remains. The lockdown of the aviation sector has also affected the availability of forex in Nigeria. And in order to cushion the impact of the economic fallout on airlines, Ismail is proposing a bailout.

Pre-COVID-19, for about eight years, the Federal Government had infused about N50 billion to stabilise airline operations. In a report by Punch, Ismail said the government recovery agency had been able to acquire about $1 billion non-performing loans - which were owed by major Nigerian airlines including Aero Contractors and Arik Air - from Nigerian banks.

He explained that the intervention of the government isn't to acquire assets belonging to airlines, but to assist the domestic airlines to stabilise their operation.