‘Aviation Development bank, restructuring key to air travel survival’
Until regulators and operators key into opportunities in an Aviation Development Bank (ADB), the local industry may have limited chances of survival.
Aviation stakeholder and Chairman NIGAV Centre, Fortune Idu, said the special intervention, among other essential recoveries and business restructuring would help the industry to tackle liquidity crisis and return to profitability.
Idu observed that the outbreak of the COVID-19 pandemic had taken a serious toll on the fortunes of the Federal Airports Authority of Nigeria (FAAN) especially, which is by and large, the strongest player within the nation’s aviation industry.
Idu notes that the recent outcry by FAAN management that if the lockdown occasioned by the pandemic continues, it might find it difficult in meeting its salary obligations for the month of May amid fear of downsizing, said it all about the crisis.
As a solution, he sought the establishment of financial support services for investments in the aviation industry, which will include the setting up of a special low interest Aviation Development Bank to support the peculiarity of investments with low interest rates within the aviation corridors of both aeronautic and non-aeronautic services. He said the Federal Government should assist FAAN in the recovery of outstanding debts currently owed it by airlines, agencies and states.
“FAAN should design and begin the implementation of a private sector-like business model so as to make at least 10 out of its 22 airports self-sustaining or viable bearing in mind that in practical terms, not all airports can be viable as some will merely play social and economic support roles, which are catalysts to development of other related businesses, but will not enhance their own bottom-line.
“FAAN should pursue with vigour, the improvement of non-aeronautic revenue and bring it up to 50 per cent in its total airport revenue. The authority urgently needs to lead a national drive for full scale aero logistics development with special investment focus on agro logistics as a way to improve cargo services and revenue. It should aspire to earn 35 per cent of its revenue from cargo services.
“Efforts should be made to optimise the land rental services through a collaborative effort by stakeholders which will see land allocation within airports serve as quick revenue generation to allow for five per cent returns on turnover,” he said.
He urged FAAN on the implementation of strategic policies aimed at reducing the bottle necks and delays associated with the processing of applications and other documents needed for doing business or investments with FAAN.
Idu said FAAN should display seriousness in penalising its officers who frustrate stakeholders and investors from full deployment of business operations after all clearance, due approvals and payments have been made to it.
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