COVID-19: AMCON seeks bailout for airlines

The Asset Management Corporation of Nigeria (AMCON), on Wednesday, joined industry stakeholders’ call on the Federal Government to consider, as a matter of top priority, bailout funds for the aviation industry.

AMCON had provided about N50bn over the last eight years to support the operations of indigenous carriers.

The corporation’s Executive Director, Operations, Aminu Ismail, made the renewed call for funding support to operators when he represented the AMCON CEO, Ahmed Kuru, at a virtual webinar with the theme: “Flying into Turbulent Skies, Safely Navigating COVID-19 Headwinds: Survival Strategies for Nigerian Aviation”.

Ismail said AMCON’s intervention led to the purchase of about $1bn Non-Performing Loans (NPL) from Nigerian banks owed by Nigerian airlines.

Although the aviation sector accounts for around eight per cent of AMCON’s restructuring portfolio, Ismail explained that the AMCON’s actions in restructuring the loans of airline operators protected the sector from collapsing.

Given the critical nature of the essential services rendered to the economy by the sector, he explained that the intervention objective of the government recovery agency was to stabilise the operations of the airlines rather than realise the assets of the airlines in settlement of their outstanding debts.

He pointed out that in the process, the huge cash flow, which is needed to run the sector effectively and efficiently, additional loans were further advanced for the purpose of providing support towards growth of the airlines, fleet expansion, job retention and job creation.

The expert said: “Aviation in Nigeria has historically been fraught with many challenges, including poor capital structure, difficulty in accessing finance, difficulty in accessing cost effective leases, high insurance costs, difficulty in accessing forex for maintenance and spare parts, multiple taxation by government agencies, weak corporate governance structure, lack of airport infrastructure and very marginal share of the lucrative regional flights of under 20 per cent.”

He reiterated the corporation’s support of any bailout from the government that would ensure the continued survival of the airline industry in Nigeria.