The new plan of intervention fund for the nation’s ailing aviation sector will not involve the release of cash to Nigerian airlines but a funding system will entail the purchase of brand new aircraft that the federal government is negotiating with aircraft manufacturers.
The federal government will provide the funds to purchase the new aircraft on stringent conditions and at very low interest rate.
This clarification was made on Channels TV weekend breakfast programme; Sunrise, by the Managing Director of the Federal Airport Authority of Nigeria (FAAN), Mr George Uriesi, where he explained that the Nigerian airlines that will benefit from the intervention will only enjoy such privilege based on stringent conditions.
According to FAAN’s MD, “the federal government of Nigeria is not buying any number of aircrafts that as being rumoured about. The government is just negotiating with aircraft manufacturers to supply brand new aircraft at globally competitive price to Nigerian airlines and funds to make the purchase will be provided by the government.”
It has been speculated that the federal government was about to purchase about 30 aircraft and practitioners in the aviation sector have been worried about how such aircraft will be distributed to the airlines operating in the nation’s airspace.
But Mr Uriesi debunked the claim about the purchase of 30 aircraft but confirmed the move on negotiating with aircraft manufacturers as part of the road map designed by the Ministry of Aviation to rescue the ailing sector.
He claimed that funds to buy these aircraft will be provided on very low interest rates instead of just giving the airlines funds from the intervention funds as it has being done twice before with no commensurate improvement in the sector.
“The interest rate will be single digit” he revealed.
This system, he notes will help address the issues of old aircraft that are plying the Nigerian airspace.
Merger for national carrier
He also denied reports that the federal government will be launching a new national carrier this year but however hinted that a merger of some notable airlines in the country will occur in the first quarter of the year and this merger will birth a national carrier that will be managed by the private sector.
“The federal government will not launch a new national carrier but it will help some new companies’ access funding to build a new national carrier” stated Mr Uriesi.
He further adds that “a couple of airlines will merge by March 2013 to emerge as the national carrier” and that “conditions that will enhance these developments are currently being put together.”
Part of the stringent conditions to access the scheme will be a thorough corporate governance structure within the prospective airlines.
When asked whether any airline in the Nigerian Aviation sector will be able to meet up to the stringent conditions at present, the FAAN boss claimed that the benefit of this new policy will be too good an offer, which would in turn make the airlines strive to operate even better.