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Airlines desperate to renew AOC over N27bn bailout funds

Airlines are in race to renew their allimportant Air Operators’ Certificates (AOC) in order to benefit from the N27 billion bailout funds that are about to be released to carriers that have valid certificates. The Federal Government had given the renewal as part of conditions airlines must meet to be beneficiaries of the palliatives that would help strengthen domestic airline operations and allow them to remain afloat. Virtually all the scheduled airlines in service have valid AOCs, but there are others who operate cargo and other charter services that are at the risk of not getting the much-needed financial assistance.

Nigerian airlines are in financial dire straits occasioned by COVID-19 that has done incalculable damage to their business as some of them are at the brink of collapse. Before COVID-19, the lack of access to foreign exchange, high cost of spare parts, lack of synergy among the carriers, poor business strategies and lack of capital to run highly capital intensive airline business had hindered the aviation industry. Some of the carriers’ AOCs had expired, prompting the Nigerian Civil Aviation Authority (NCAA) to extend the validity by 90 days because of outbreak of coronavirus pandemic.

The implication of this is that many airlines that are yet to renew their AOCs after the 90 days validity extension would not benefit from the largesse that the carriers desperately need to revive their airlines. This is coming as the Federal Government said that the new NCAA Bill presently before the National Assembly would address some of the challenges in the sector. Director-General of NCAA, Capt. Musa Nuhu, stated this yesterday during a Webinar monitored by New Telegraph in Lagos.

He stated the readiness of the government to grant operators the palliatives to cushion the effect of COVID- 19 on their operations, but insisted that airlines without valid AOC would not be allowed to benefit from the funds. It would be recalled that the Federal Government had approved the sum of N27 billion for the entire aviation industry in Nigeria, while reports claimed that N10 billion out of the sum was earmarked for indigenous airline operators. Sources close to the industry had claimed that some of the airlines without valid AOCs, also applied to get some money from the palliative, but with Nuhu’s statement, such airlines may not benefit from it. Presently, scheduled airlines with valid AOCs are Overland, Air Peace, Med- View, Aero Contractors, Max Air, Azman Air, Arik Air and Dana Air. Nuhu said that the government and the agency would work with the umbrella body of local carriers, Airline Operators of Nigeria (AON) to disburse the palliatives to the beneficiaries. He said: “This issue of palliative is a policy, driven by Senator Hadi Sirika for all players in the industry. Existing and defunct airlines are free to apply for the fund, but it is airlines with valid AOC that will benefit from it. Also, I believe AON has its guidelines, but if you don’t have a functional AOC, you should forget it.”

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