The federal government has ruled out a bailout for local airlines, saying good policies by the administration will enhance survival of domestic airlines in the country.
Domestic airlines have been operating under a tough environment occasioned by floating of naira that has made foreign currencies especially United States dollar value appreciate against the naira.
Also, the skyrocketing price of aviation fuel also known as Jet-A1 has made airlines operate under very tough environments.
However, speaking at the Ministry of Aviation and Aerospace Development Conference on the Cape Town Convention and Aircraft Protocol Implementation in Abuja, on Thursday, the Vice President, Senator Kashim Shettima, said government cannot keep giving domestic airline operators money for their survival, but will rather promote good policies for their growth.
Shettima, who was represented by the minister of Aviation and Aerospace Development, Festus Keyamo, assured airline operators that the government will put in place policies and processes that will ensure domestic Airlines in the country do not go extinct.
According to the Vice-president, “It behooves us now in office to find out why they went under and how we can ensure that it does not happen again. And the only way we can do that is by policy. Policy frameworks to ensure that they survive. We can’t keep giving them money, then we must make the business conducive for them to survive.”
He continued, “one of the key elements that we recognize as a government is to ensure that we unlock the international markets on aircraft, and at the heart of that is to ensure the full compliance with the tenants of the Cape Town convention.”
Sen. Shettima further stated that with the advent of the Cape Town Convention (CTC), domestic Airlines in the country will not go extinct as was the case in the past.
He argued that the country witnessed very high mortality rates of domestic Airlines in the last 40 years.
While commending local operators for their resilience despite the excruciating business environment, he affirmed that the Cape Town Convention has proven to be a transformative legal framework, harmonising diverse global legal systems to foster predictability and stability for aviation stakeholders.
“For Nigeria, this Convention has not only enhanced our global standing but has also opened doors to increased investment and growth in aviation financing.
The recently issued Federal High Court Practice Directions and Advisory Circular mark significant milestones in our journey to align with international best practices. These initiatives have streamlined legal processes, enhanced jurisdictional clarity, and improved Nigeria’s compliance index, positioning our nation among global leaders in aviation governance.”
On his part, the acting director general of the Nigerian Civil Aviation Authority (NCAA), Capt. Chris Najomo, said the Cape Town Convention aligns seamlessly with the Renewed Hope agenda of President Bola Tinubu.
According to him, the convention has offered a pathway to modernizing the country’s aviation sector and ensuring its contribution to Nigeria’s prosperity.
“As you are all aware, Nigeria’s aviation sector holds great potential for driving economic transformation, connecting communities, and promoting regional integration. The benefits of these efforts are already evident. Nigeria’s improved ranking on the Aviation Working Group’s Cape Town Convention Compliance Index is a testament to our progress.”
He outlined the objectives of the convention to include streamlining aircraft transactions and facilitating asset based financing, simplifying the process of buying, selling, and leasing aircraft on an international scale.
“By protecting creditors’ rights and ensuring the enforceability of interests in mobile equipment, the Convention encourages investment and reduces the cost of financing. The Convention establishes a centralised electronic registry for registering interests, offering transparency and public notice.
“It also harmonises the treatment of security interests across participating nations, further ensuring repossession and recovery rights for lessors and lenders in case of defaults.”
“Aligns national regulations with global best practices, supporting the aviation industry’s growth and stability, fostering confidence among international investors and financiers.”
We’ve got the edge. Get real-time reports, breaking scoops, and exclusive angles delivered straight to your phone. Don’t settle for stale news. Join LEADERSHIP NEWS on WhatsApp for 24/7 updates →
Join Our WhatsApp Channel
