Nigerian government approves NGN 27bn bailout for local airlines

Nigeria´s federal government has announced its pledge to bail out the local aviation sector with a sum of NGN 27 billion as part of measures to restart air travel and keep airports safer, the government said.

The sum, already proposed to some of the operators, will besides supporting the airlines, also fast-track the establishment of a private sector-driven national carrier.

The federal government in March restricted local and International commercial flight services to slow the spread of the coronavirus pandemic. The lockdown crippled the aviation sector. Industry estimates showed that the sector lost about NGN 180 billion, with airlines being worst hit. Over 5000 registered travel agencies furloughed their entire staff, while airlines retained only 20% of workers at slashed salary.

A breakdown of the project elements under the NGN 27 billion cushion include payroll grant support to airlines, handlers, caterers and related services; provision of single-digit soft loans with long term repayment plan; and deferred payment of taxes and filing dates.

The government is to ensure the removal of Value Added Tax (VAT) from airlines´ tickets as approved by the Federal Executive Council (FEC); provision of COVID-19 tests for all passengers and crew; waiver of airport rent fees to airport operators for the duration of the lockdown plus one month; and beginning of processes for the establishment of a private sector-driven national carrier. The workplan has a 12-month duration.