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FOREX Scarcity, Crippling Aviation Sector – Stakeholders

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..We need bailout fund – Airline operators

Non-availability of foreign exchange is currently crippling the aviation sector,  stakeholders comprising the Nigerian Civil Aviation Authority (NCAA) and some local airline operators have revealed.

The stakeholders made the revelation in Abuja yesterday, during an interactive session with the Senate Committee on Aviation on the state of the industry.

FirstNation Airline, Arik Air and Aero Contractors made presentations to the committee on their challenges ranging from technical problems to scarcity of foreign exchange to pay for services outside the country.

NCAA director-general, Captain Muhktar Usman, also identified lack of forex and floating of the Naira as part of the problems currently bedeviling the aviation sector.

He explained the rationale behind the stoppage of operations by some airlines in recent times, saying extant law stipulates a condition every operator must fulfill, that is a minimum of three airplanes of similar type out of which two must be operational.

The representative of FirstNation, Captain Chimara Imediegum, said the engine of the one of its airplanes is faulty and needed to be sent abroad for repairs but the inability of its bankers to transfer dollar equivalent of the money required has stalled the repair.

He added that given industry rule, the airline has to stop its operations because it has only one functional aircraft left while assuring the committee FirstNation will resume operation soon.

For his part, the managing director of Aero Contractors, Captain Fola Akinkoutu, told the lawmakers that the airline has been operating for 59 years now, adding that it has to suspend its scheduled operations due to inability to deliver quality services.

“I also want to put it on record that we have forex challenges…As we speak, we are owing July and August salaries and it was not deliberate but the income does match expenditure,” Akinkoutu said.

The Senators however expressed worries that Assets Management Corporation of Nigeria (AMCON) after taking over 60% of Aero Contractors’ shares has abandoned the airline to its fate.

Also, making his presentation, the managing director of Arik Airline, Mr. Chris Ndulue, complained of multiple charges by the aviation regulatory agencies which amounts to about 40% of a passenger’s ticket fee.

“There are many problems but if you look at them critically, you can narrow down or three and four issues…The next thing that has become critical now is exchange rate,” Ndulue said.

He added that apart from the forex issue that is a new problem, many challenges have been with the industry for a long time, saying that if the problems are addressed, the airlines would be able to operate on a sustainable level.

He therefore called on the committee to help to see that a bailout fund is also extended to the airlines in order to salvage the ailing ones among them.

Meanwhile, responding, the NCAA DG disagreed that the charges paid by airlines amount to about 40% of a passenger’s air ticket fare, noting that the charges were statutory and shared by four aviation agencies with the exception of FAAN.

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