Stella Oduah, Aviation Minister
Airlines operating in the country have rejected Federal Government’s proposal for merger.
Airline operators, who spoke to THISDAY indicated that the government had so far failed to persuade them to go into merger, which was aimed at having stronger airlines and also to possibly develop a national carrier.
The federal government was convinced that for Nigeria to benefit from its huge air transport market it must have a national carrier- a position which is germane- but lampooned by some industry observers because of their belief that such airline, no matter the ownership arrangement would never succeed.
The operators told THISDAY why such merger would not work, remarking that the apart from the different philosophy behind each individual airline, it would be difficult in this clime to achieve a compatibility between disparate entities.
An operator of a major airline told THISDAY: “Merger is difficult, acquisition, yes. Government should give incentives like tax relief, landing and parking waiver for a certain number of years to encourage some airlines to acquire others.”
The operator explained that Nigerian airlines were owned by families, so government should encourage or give incentives to make stronger airlines to acquire others.
A source in one of the aviation regulatory agencies revealed that the federal government knew that Nigeria was losing tremendously in air transport in the country as foreign airlines repatriate over N35 billion annually as ticket sales from the country.
“So merging would have been a way of reducing the number of the airlines, leaving two or three big operators as government plans to facilitate a single digit, long term credit line to the few operators.
Right now, the Ministry of Aviation is working with the Central Bank of Nigeria (CBN) to offer low interest loans to the airlines,” the source.
“So merging would have been a way of reducing the number of the airlines, leaving two or three big operators as government plans to facilitate a single digit, long term credit line to the few operators.
Right now, the Ministry of Aviation is working with the Central Bank of Nigeria (CBN) to offer low interest loans to the airlines,” the source.
A top official in Nigeria’s major airline told THISDAY, that “every help in aviation is welcome, but the help must be transparent to all parties, so that there will not be unfair treatment. There must be a way of ensuring that the help is targeted to the airlines to the organisations grow.”
The official also remarked that when a company was being assisted financially, the provider of the funds should help to manage the money so that it should not be diverted.
“The plan of the Federal Government is that with strong national carrier or flag carriers, Nigeria may begin to benefit from its ever growing air transport market, which favours foreign airlines with huge capacity at the moment.
“If there are about two very strong domestic airlines, government would provide them with incentives, offer them international routes, while strengthening local operations so that they would be competitive in the international market.
“The bailout to the automobile companies in the United States was given by the government and there were conditions that must be met to access such funds and the conditions were given to check possible abuses so that the beneficiary company would manage the funds judiciously,” the source explained.
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