Business - Companies
Updated: November 03, 2020

N4billion Bailout For Nigerian Airlines Rejected By Senate

By Olalekan Fakoyejo
November 03, 2020
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The Nigerian Senate have turn down the Federal Government's NGN4 billion bailout plan for airline companies. The government had offered financial support for the Aviation industry which have been crippled financially due to the COVID-19 pandemic and lockdown measure.

The NGN4 billion is a part of the NGN5 billion the President Muhammadu Buhari-led administration have earmarked for the Nigerian aviation which lost about NGN21 billion for every month the air travel industry was on lockdown - the Aviation sector was lockdown for four months.

According to the Minister of Aviation, Hadi Sirika, NGN4 billion was budgeted for airline operators, while NGN1 billion is for other businesses within the industry, “The Federal Government has approved N4bn as bailout for the airlines and N1bn for other businesses within the civil aviation.

“We are already putting arrangements for the disbursement in place and once we start, it would be transparently done.” He made this known to the Senate Committee on Aviation at the opening of a three-day public hearing. The hearing was on six executive bills drafted to reorganise the civil aviation agencies in the country amidst COVID-19 effect.

Bailout Too Small For Airline Operators

Chairman, Senate Committee on Aviation, Senator Smart Adeyemi, disagreed with the amount earmarked for the airline companies, stating that the NGN4 billion intervention fund will not be enough to cushion the negative effect of COVID-19 and lockdown on the airline operators.

Adeyemi said in order to prevent airlines from shutting down operation in Nigeria, the government will have to increase the bailout, “If we really want to keep the airline operators in business, and we don’t want them to close shops and go home, the Federal Government should shore up the amount.

“If you want to keep the airlines in business and you don’t want them to start cutting corners, there is need to look at the airlines with a view to giving them substantive support.” Adeyemi told Sirika, who in turn stated that if any increment is to be done, the Senate will play a crucial role.