N5billion bail helped airlines to meet some challenges
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| The Five billion Naira (N5BN) financial aid to the domestic airlines by the Federal Government in the wake of the harsh operational climate occasioned by the Corona virus pandemic has helped them to surmount some of the financial challenges facing them. |
| Though, the money was not enough, the airlines in Nigeria expected more from the government when compared to other countries where their airlines receive massive supports of. Managing Director of Arik Air,Capt.Roy Ilogbodi,who bared his mind on the issue while reacting to questions from members of the executive of the League of Airport and Aviation Correspondents(LAAC) said ”What I would say is that what we got was definitely not enough”. “ The impact of the pandemic have been quite significant as you follow news from all around the world you see that it is the same situation everywhere. Government have come massively in support of airlines so we did expect a bit more from government.” . “However, that said we also understand that government itself faces significant challenges from all other sectors of the economy. Therefore we do not think of ourselves as unique. So we appreciate the little we got something little is better than nothing, so I think that helped in its own little way aiding us to surmount some of the challenges we face.” According to Capt.Ilogbodi,the airlines are still facing significant challenges going forward, as they are still grappling with them such as foreign exchange, that is one big issue.. The exchange rates have virtually gone up significantly approximately 40% since COVID struck. You realize that our industry itself is quite tied to the supply from outside Nigeria. “ To support an aircraft with spare parts you need all sorts coming in. So significant sums of monies are spent on maintenance of the airplane on a daily basis. You cant compromise maintenance of aircraft . The tires on an airplane, some people don’t realize how much we change those tyres.” “You cannot use an aircraft tyres for example like the way you use your car tyres till they get burst. You have to change them regularly whether they look old or not. So you see that happening on daily basis because some of them are rotables. Its quite significant for us to face all this and now coupled with the exchange rate, so we do need more help from government. As much as government can give, we will appreciate, especially if that can be resolved (Foreign exchange ) that major aspect for us.” “Passengers are not really travelling as much as before, we’ve seen that however, some airlines may not notice that now because that is because the capacity has also dwindled. What I mean by that is that the airlines have suffered so much that the fleet sizes have gone down, therefore normally you will not notice that passenger numbers have dwindled.” “As airlines start to recover, it will become apparent that people are no longer travelling as much as they used to do pre-covid. But the good news is that the vaccines are here and so it gives everyone hope, I do expect that in the next couple of months there will be a lot more movement and things will start to come back to normal.” On connection between Nigeria Eagle and Arik Air,he said “Well, in reality there is no connection between the two. That said, you are aware that Nigeria Eagle is solely owned by Asset Management Corporation of Nigeria ( AMCON) and of course you know that Arik Air itself is in receivership and the receivership was instituted by AMCON which is based on the fact that Arik owes significant sums if money to AMCON. So if you can infer from there that’s the relationship” Asked how much the Airline buys Aviation fuel”,Well I can’t give you that information accurately here but suffice it to say that aviation fuel is tied to the exchange rate. Our aviation fuel is imported so anything that is imported is affected by enumerations in dollar/ naira exchange rate. If we say FX has gone up about 40% then it is safe to say prices of jet fuel have gone up too y about 40 %” He told LAAC executive how much Arik Air can save if it does not land on Runway 18R,saying”There would be significant sums of savings, I cannot even begin to quantify. It is actually a huge drain on not just Arik but all the other operators that have to do night operations” . “That can be resolved by installing the Runway lights at the local runway but yes huge sums of money can be saved. Yes, an airplane cycle starts when you start the engine and you are using fuel, the wear and tear on the engine. So for every cycle, it doesn’t matter if that cycle is from here to Benin or from here to London or from here to the US, it is one cycle. So it costs money and that cost is the same whether it is London or Dubai, it is one cycle, it is one cycle” “For instance the engine when it is brand new, you say it has 20,000 cycles of life and so you fly 1000 cycles every year, that means that you expect those engines to run for 20 years at 20,000 it goes to zero you cannot use those engines until it goes back to shop for overhaul and those materials that are time related are replaced, those cost for us are much. So that trip for us from the international airport, 10 minutes sometimes more across runway, its something we calculate daily anytime after six you know that is additional cost for the airline.” “We continue to engage the Federal Airports Authority of Nigeria( FAAN) because, anything that brings savings to an airline we will likely pursue vigorously but we also note that FAAN themselves face challenges in respect to funding. I think the entire industry is in a situation where significant sums of money need to be injected into the system to assist” . “If you go to Ethiopia, the country is centered around aviation, they built one of the biggest hotels in Africa as an airline, they’ve taken over the terminal fully, you can see what they are doing, they are actually taking care of cargo transportation in and out of their country. They have a huge network, they may not necessarily have a robust domestic network like us here but I think their global network is quite interesting. “Until government becomes aware of that someone is able to say this is what the airlines contribute to the economy, until that is clear, that is when they will see why you need to keep the airlines alive” |
