1 February 2013

Nigeria: FG to Purchase New Aircraft At Low Interest Rate

Managing Director of the Federal Airport Authority of Nigeria (FAAN), Mr. George Uriesi, has said the Federal Government did not intend to release money to the airlines in the next intervention fund but to use the money to acquire new aircraft from aircraft manufacturers.

Speaking with journalists in Lagos on Tuesday, he said the airlines that would benefit from the intervention would only enjoy such privilege based on stringent conditions.

"Federal government is not buying any number of aircraft that as it is being rumoured, government is just negotiating with aircraft manufacturers to supply brand new aircraft at globally competitive price to airlines and funds to make the purchase will be provided by the government."

Uriesi debunked the claim about the purchase of 30 aircraft but confirmed the move on negotiating with aircraft manufacturers as part of the road map designed by the Ministry of Aviation to rescue the ailing sector.

He claimed that funds to buy these aircraft would be provided on very low interest rates instead of just giving the airlines funds from the intervention funds as it has been done twice before with no commensurate improvement in the sector.

Uriesi said the interest rate would be single digit, remarking that when the airlines would be given this lifeline government would then address issue of old aircraft that are plying the Nigerian airspace.

Speaking also on the issue of national carrier, the FAAN boss denied reports that the Federal Government would be launching a new National carrier this year but however hinted that a merger of some notable airlines in the country would occur in the first quarter of the year and this merger would give birth to a national carrier that would be managed by the private sector.

"The Federal Government will not launch a new national carrier but it will help some new companies access funding to build a new national carrier" Uriesi also said.

He said that a couple of airlines would come together by March 2013 to emerge as the national carrier, adding that the conditions that would enhance these developments were currently being put together

Part of the stringent conditions to access the scheme would be a thorough corporate governance structure within the prospective airlines.

When asked whether any airline in the Nigerian aviation sector would be able to meet up to the stringent conditions at present, the FAAN boss claimed that the benefit of this new policy would be too good an offer, which would in turn make the airlines strive to operate with higher standards.

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