If the recommendations of the Ahmed Joda-led transition committee is anything to go by, the Muhammudu Buhari administration may be considering merging all debtor airlines in the country to form a national carrier.
Six of Nigeria’s leading domestic airlines are currently bogged down by huge debts totalling almost N130 billion, forcing them to turn to the Asset Management Corporation of Nigeria (AMCON) for a lifeline. Their debts, according to the Federal Ministry of Aviation excluded sundry debts to aviation agencies like the Federal Airports Authority of Nigeria (FAAN), the Nigerian Airspace Management Agency (NAMA), suppliers and other institutions.
Details of the audit findings by the Aviation ministry showed that Aero Contractors’ debt stood at over $200 million (N308 billion), with 60 per cent of its equity already taken over by AMCON, while Arik Air has been in debt to the tune of over $600 million (N924 billion); IRS Airlines, $55 million (N84 billion); Chanchangi Airlines, $55 million (N84 billion), and the now bankrupt Air Nigeria owing about $225.8 million (N347.7 billion).
The Joda committee had in its report advised President Buhari to consider a public-private partnership (PPP) arrangement that would involve all airlines currently with AMCON, as part of the federal government’s contribution to a national carrier project.
The committee recommended that the decision be carried out in six months. This, it said, would increase government revenue from the sector, reduce capital flight, expand the local aviation industry and create more employment opportunities to the people.
The committee, which noted poor utilisation as one of the key challenges in the sector, said about 75 percent of passenger traffic were generated from three airports – Lagos, Port Harcourt and Abuja, while over 90 per ent of the revenue earned came from Lagos and Abuja.
The committee further advised that the Nigerian Civil Aviation Authority (NCAA) should in the next three months consider the upward review of capital requirements for airlines to N2.5 billion (domestic) and N5billion (international), to ensure a realistic capital base for domestic and international airlines for sustainability in accordance with global best practices.