Business

Aviation industry worst hit by COVID-19, says Aligbe

Worried by what he called the “severe” impact of coronavirus (COVID-19) pandemic on the aviation industry, analyst and the CEO of Belujane Konzult, Mr Chris Aligbe yesterday raised alarm over impending collapse of the industry.

Aligbe said this was as a result of the travel restriction which was imposed globally as a measure to contain the COVID-19 pandemic.

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Aligbe in a chat with newsmen said the entire spectrum of the industry – the aviation agencies, the airlines, the handling companies and other aviation allied support service providers – are reeling from the impact of the coronavirus induced shutdown.

To get the industry back on its feet after the coronavirus pandemic, he advocated for allocations to agencies like the Federal Airports Authority of Nigeria (FAAN) which depends on the flights to generate revenues to run the 22 airports under its purview.

According to Aligbe, with the suspension of flights by both domestic and foreign airlines, FAAN revenue base, both aeronautical and non-aeronautical revenue, has disappeared.

He also said for airlines to remain alive after the pandemic, the government must support them with grants to stay afloat and keep people in their employ.

He said though the airlines as well as handling companies like the Nigerian Aviation Handling Company (NAHCo) and the Skyway Aviation Handling Company (SAHCO) are private businesses, they contribute to GDP with the employments they create and the taxes they pay.

He noted that just like FAAN, the Nigeria Air Space Management Agency (NAMA), the Nigerian Civil Aviation Authority (NCAA), the Accident Investigation Bureau (AIB) as well as the Nigeria College of Aviation Technology (NCAT) need some lifeline to survive the COVID-19 crisis.

Aligbe said NAMA which depends on overflight charges, air route charges to sustain its operation is suffering because there are no flights.    

He said, “Every aspect of the industry is impacted particularly because of the revenues in the industry depends on the flights whether it is aeronautical or non-aeronautical. The more flights you have into an airport, the more likely businesses will develop around the airport.

“The main revenue generation, the passenger sale charge (PSC), the ticket sale charge (TSC), that is the main revenue that is generated and shared among the parastatals particularly like the regulatory body that does not engage in business like the AIB and NIMET though NIMET engages in business limitedly.

“But FAAN (the Federal Airports Authority of Nigeria) engages in business and its business is dependent on a lot of flights that come in; the landing and parking charges, the rentals, and all other businesses whether you are talking about airport charges, whether you are talking about toll gate charges, duty-free shops or eateries, restaurants, it all depends on whether the people are coming, it depends on the travelling passengers and more importantly it depends on meeters and greeters.

“Now FAAN cannot get that because flights are not coming, all businesses are shut down and more importantly on the side of FAAN, they are losing both aeronautical and non-aeronautical revenues. They have lost it and there is no other place for them to generate any fund.”

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