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Tag: Bailout

  • COVID-19: FG approves N4bn bailout for indigenous airlines

    COVID-19: FG approves N4bn bailout for indigenous airlines

    The Federal Government has approved N4 billion as a bailout fund to airlines to cushion the effects of the impact of the devastation of COVID-19 on their operations.

    Aviation Minister, Hadi Sirika made the disclosure on Monday in Abuja at a three day public hearing to repeal and enact Acts of Nigerian Civil Aviation Authority (NCAA), the Nigerian Airspace Management Agency (NAMA), Accident Investigation Bureau (AIB), Nigerian College of Aviation Technology (NCAT), Nigerian Meteorological Agency (NIMET) and that of the Federal Airports Authority of Nigeria (FAAN).

    Sirika also stated that the Federal Government approved an additional N1 Billion for aviation agencies to also cushion the sorry state of most of them which has made payment of salaries difficult.

    The Minister however stated that very soon, the funds would be distributed to the carriers, stressing that the aviation industry in Nigeria was too crucial to fail.

    He described the sector both in Nigeria and elsewhere as very important to economic development of any nation.

    Not impressed with the N4bn to airlines, Chairman, Senate Committee on Aviation, Senator Smart Adeyemi urged the Federal Government to do more.

    His words, “N4bn is very little to solve some of the problems of the airlines who are battling to survive. We urge the government to take charge of the sector. They need to give them more and they also need to support in all ways.”

    He warned that if nothing was done to assist the carriers, the tendency for them to cut corners was very high in the midst of dwindling liquidity.

    “Yes, the airlines are in business but we cannot continue to look at them without offering them assistance. I am not comparing Nigeria with the United States, but I think we can do better than the N4b we are assisting them with.”

    Sirika fired back, saying he had noted the plea of the National Assembly to give more financial support to the airlines but pleaded with the lawmakers to grant approval for funds to struggling airlines.

    The International Air Transport Association (IATA) urged the government to implement specific financial relief measures for aviation to ensure that the sector will be capable of driving the recovery.

    Prior to the crisis, aviation contributed $1.7 billion to Nigeria’s GDP and supported 241,000 jobs.

    IATA estimates that the COVID-19 crisis puts 124,000 Nigerian jobs at risk and some $900 million of the country’s GDP.

    The Nigerian government has introduced broad economic relief packages to mitigate the devastation caused by COVID-19

    “Nigeria has announced general relief measures for sectors affected by COVID-19, but not specifically for aviation. Given the importance of air transport for Nigeria’s economy and connectivity, the government must not let aviation fail.

    The industry faces a liquidity crisis. Without a viable aviation sector Nigeria’s eventual recovery from COVID-19 will be longer and even more painful. Aviation-specific financial relief measures are urgently needed as a matter of survival,” said Muhammad Albakri, IATA’s Regional Vice President for Africa and the Middle East.

  • Coronavirus epidemic: Virgin Atlantic, other UK airlines beg government for £7.5bn bailout

    Coronavirus epidemic: Virgin Atlantic, other UK airlines beg government for £7.5bn bailout

    Virgin Atlantic is leading Britain’s airline industry to request for emergency government support worth up to £7.5 billion and avert a catastrophe that would wipe out tens of thousands of jobs.

    Sky News and other news outlets reported on Saturday that Peter Norris, the chairman of Virgin Atlantic Airways’ majority shareholder, Virgin Group, will write to Prime Minister Boris Johnson on Monday to warn that the sector needs immediate financial aid to survive.

    The bailout request will come ahead of what could prove to be the bloodiest week in British aviation history, with British Airways, Virgin Atlantic, easyJet and Ryanair all expected to announce mass groundings of aircraft and potentially huge redundancies as the COVID-19 crisis escalates.

    Mr Norris’s letter – which is also understood to be being signed by Shai Weiss, Virgin Atlantic’s chief executive – would ask the government to provide airlines with a credit facility to help them finance themselves through a potentially protracted period of negligible revenue.

    That support, which the Virgin chairman estimates would be worth between £5bn and £7.5bn across the industry, would include cash advances and guarantees, as well as other measures to ensure that credit card companies do not continue to hoard revenue from airline bookings.

    Under Mr Norris’s blueprint, this emergency financing would be repaid once trading returns to more normal levels.

    Mr Norris would also ask the PM to extend the timetable for allowing airlines to keep planes grounded without losing their prized take-off and landing slots for the entire summer season.

    The trade body IATA has estimated that the airline industry globally could forfeit $113bn in revenue as a result of COVID-19 – a figure it may have to increase again.

    This week, Alex Cruz, BA’s chief executive, told the flag-carrier’s 45,000 staff that it was being engulfed by “a crisis of global proportions like no other we have known”.

    Mr Cruz warned of impending job cuts, although he declined to say in his message to employees how many would be affected.

    He added that the COVID-19 situation was “more serious” than the financial crisis of 2008, the SARS epidemic and the terrorist attacks of September 11, 2001.

    The UK aviation industry generates approximately £10bn of GDP and employs roughly 200,000 people.

  • Flood: Osinbajo approves release of N1.6bn bailout to Lagos, Niger, Enugu, 12 other states

    Flood: Osinbajo approves release of N1.6bn bailout to Lagos, Niger, Enugu, 12 other states

    Sequel to the devastating effects of the heavy downpour last week on most states in the country, the Acting President, Prof. Yemi Osinbajo, has directed the Minister of Finance, Kemi Adeosun, to immediately release N1.6 billion for the 15 states ravaged by floods.

    The states include; Ekiti, Osun, Akwa Ibom, Kebbi, Niger, Kwara, Ebonyi, Enugu, Abia, Oyo, Lagos, Plateau, Sokoto, Edo and Bayelsa

    Spokesperson to President Muhammadu Buhari, Femi Adesina, made the disclosure to newsmen after the Federal Executive Council, FEC.

    Adesina said the money will help cushion the effects of the disaster on residents of the states.

    He explained said the fund “would be taken from the Federal Government’s Ecological Account in the Central Bank of Nigeria”.

    He said the Minister of Finance has been directed to release the money directly to the National Emergency Management Agency, NEMA, for onward distribution to the affected states.

  • Help! Nigerian pharmaceutical industry needs over N30bn bailout – Okoli

    The Chief Executive Officer of Emzor Pharmaceuticals, Dr Stella Okoli, on Monday said the pharmaceutical industry was in need of urgent government intervention, as it required injection of funds in the region of N30 billion.

    Okoli told newsmen at an interactive session in Lagos that injection of funds by the government would help the industry to do better and take its rightful place in the country.

    The pharmacist, also member, Board of the Nigerian Industrial Policy and Competitiveness Advisory Council, said it was unfortunate that the previous administration in the country left out the pharmaceutical industry out in its bailout programme.

    She, however, urged the President Muhammadu Buhari-led administration to give the needed support in order to enable the industry to create more jobs and meet up in the area of required vaccines in the country.

    “The industry must be funded so that we can buy the equipment, machinery and raw materials in the Nigerian industries,” Okoli said.

    The pharmacist also called for the downward review of interest rates in order to make the industries more comfortable in the competitive market.

    She appealed to the Lagos State Government to do away with multiple taxations, describing the current tax regime as “very challenging“ for those in the industry in the state.

    Okoli also urged the federal government to equip its hospitals and discourage Nigerians from travelling to India for medical tourism.

    According to her, the government needs to quickly set up a new national industrial policy and encourage young people who are very good in Information Technology (IT).

    She said that the computer village in Lagos State could be converted into a training ground for young brains on IT-related areas to enable them to make more meaningful contributions in the country.

    “Use our youths and encourage the industries that have been there, and fashion a way to continue to attract foreign direct investment – those that love Nigeria; those that come to help us and not those that have come to hurt us,” the pharmacist said.

    Okoli said the Federal Government had a lot to learn from Asian countries and their use of industrial parks, urging the authorities to transform the nation’s fortunes with an industrial revolution.

     

    NAN