Air Peace Chairman Says Financing Airlines Goes Beyond Borrowing Money
The Chairman of Air Peace Limited, Dr. Allen Onyema says the financing support that Nigeria’s local airlines are clamouring for goes beyond lending them money.
Speaking during the 29th Annual Conference of League of Airport & Aviation Correspondents (LAAC) held in Lagos with the theme, “Aviation Financing in Nigeria: The Risks, Opportunities and Prospects”, Onyema said “airlines will be willing to have the federal government support them by ways of guarantying our loans, locally or internationally. That would be good, but at the same time, the airlines themselves first of all, must do what is called self-introspection.
You ask yourself questions. It is not that when you push the government to guarantee and then, you disappoint in repayment. Then, we go back to square one. You have to do self-introspection. Have you examined the kind of business you want to do? Do you have data to tell yourself, this is what I am going to do? I am going to be a premium service-driven airline or budget-driven airline or that kind of thing.
Again, you have to look at your climate; the environment within which you operate. Ask, what is your market share before you borrow money? When you borrow more than you deserve or more than you need, that is a problem too. So, I support government coming in, but the good news is that the federal government of course with our Minister, Keyamo, is about setting up a leasing company, whereby they will get these planes and lease it to Nigerian airlines at single digit whatever. It varies for them to possess the airplane because the airline is part of it. So, that is a very, very big way. In fact, I can’t thank President Bola Tinubu enough for looking the way of the airlines and allowing Festus Keyamo to be doing the things he is doing. Like I said, the financing is not only when you go out there to borrow money. When you introduce the ease of business and make things easier, airlines will grow their finances.
Another thing is that the charges and taxes airlines are being made to pay in this country are enormous. The Airline Operators of Nigeria (AON) last week, took that to the Minister and I am sure he is working on them now to see the ones we can drop and the ones that can be amended.
Some of them come from legislative arm. So the most important thing is that the government is listening to us and that is very important. I would believe that within the next one year, things will change drastically for the airlines.”
“If we are given that succour to borrow money at single digit interest rates, no airline will fail in this country” he said, adding that “if the premium to pay on insurance can change, it will help the bottom lines of the airlines.”
He said aviation should be treated “a little bit separately from other sectors because it is a very critical sector, capital intensive. The return on investment is very low, not only in Nigeria but worldwide. So, you don’t treat aviation the way you treat other sectors. There is a lot to it. We deserve and demand to have a very liberal, very affordable rates for funding.”
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