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Published On: Wed, Feb 14th, 2018

‘You don’t have ability to transparently record debts owed by airlines’

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From Suleiman Idris, Lagos

Chairman, Airline Operators of Nigeria (AON), Capt. Nogie Meggison has chided agencies of the aviation ministry for their inability to transparently record their revenues and document accurately the debts owed them by the airline operators.
Meggison also accused the Asset Management Corporation of Nigeria(AMCON) of competing with domestic airlines, adding that the is no level playing field.
He said the Minister of State, Aviation, Senator Hadi Sirika was wrong for saying that the N516 billion debts, which the Minister claimed domestic airlines owe aviation agencies and other organisations in Nigeria are questionable and cannot be proved.
“We have always asked them to list the debts. It is easy to call numbers. Let those we owe bring their bills and explain the debts. Although government cannot be held responsible for the operation of privately owned airlines, but the Asset Management Corporation of Nigeria (AMCON) is competing with airlines, running two airlines with tax payers’ funds. So we don’t have a level playing ground because AMCON is a competitor, using the taxes we pay to compete with us. When are they going to leave the airline industry?”
He pointed out that debt accrued in the aviation industry is a given because airline operation is a continuum as long as airlines render services they will incur debts from service providers, which are normally settled.
In his words, “Talking about debts, airline business is not a cash business you accrue the charges you are presented a bill and you pay. No airline in this world that does not owe.”
Speaking on Single African Air Transport Market(SAATM), the AON Scribe stated that for the new policy to work Africa Civil Aviation Commission (AFCAC) should provide a level playing field, adding that for SAATM to work every member country should charge the same amount from one country to another.
To buttress his point, he cited the case of Nigeria ,where an airline borrows money at 24 per cent interest rate, pay 5 per cent to the Nigerian Civil Aviation Authority (NCAA) and also 5 per cent Value Added(VAT) but that these rates or charges are waived by government of other countries to support their own airlines.
Also speaking, the former Vice-Chairman of Arik Air, Senator Anietie Okon argued that airlines do not owe that much and that if they are not doing well as alleged by the Minister, it is his responsibility and that of the government to ensure that airlines improve their operations.
Senator Okon said the Minister should be able to calculate the value of the assets of an airline and calculate the percentage of debts to the airline before saying that an airline went under, when there was a preconceived plan to take over an airline.
According to him, “If the total debts of an airline are just 10 percent of its assets how can you say that the company is insolvent?
Okon said that because of the critical role airlines play in the economy of every nation, sincere governments give support to airlines, whether government or privately owned.
He cited airlines such as Jet Airways of India, Kenya Airways, South Africa Airways and even recently Emirates, who according to him at a point had financial issues that they were assisted by their governments to sustain their operations.
“If all airlines in Nigeria are not doing well, what is the Minister doing about it? You are running the most nepotic administration, filling everyway with your people who are not even competent and you are running down those that committed their huge resources to run the airline industry. You know that the airlines are subjected to multiple taxation; you know that airlines cannot fly to over 18 airports in the country after 6:00 pm because there is no enough facilities and you are saying that government is not responsible for most of the problems of the airlines.”

“We took the trouble to invest and you keep on bandying figures, possibly amusing yourself because you don’t know that your management style is crumbling people’s investment,” Okon said.

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