Nigerian President Bola Tinubu has agreed in principle to write off part of domestic airlines’ debts to aviation agencies following successful talks, after carriers threatened to halt operations over crippling fuel prices.
The Minister of Aviation and Aerospace Development, Festus Keyamo, says the Federal Government has decided to grant domestic airlines discounts on debts owed aviation agencies.
Mr Keyamo said this in Abuja where he held a high level meeting with officials of the Ministry of Petroleum Resources (Oil) and the Airline Operators of Nigeria (AON) over the sharp rise in the cost of Jet A1 fuel.
A debt discount, also known as a discounted payoff (DPO), occurs when a lender or creditor agrees to accept less than the full amount owed to settle a debt.
According to the minister, the percentage of the discount for domestic airlines will be determined by President Bola Tinubu.
He said the president had directed airlines to urgently submit formal requests regarding the proposed debt relief.
Mr Keyamo added that the president had also approved the establishment of a committee to review multiple taxes, levies and charges imposed on domestic flight tickets.
He said the committee was aimed at reducing the cost burden on both operators and passengers.
Earlier, the Airline Operators of Nigeria (AON) had warned of halting operations due to high jet fuel costs, but agreed to delay the action pending a meeting on April 22.
The minister said the federal government intervened swiftly to prevent disruption to air travel following the operators’ warning.
According to the minister, the president is prepared to approve a ‘generous discount’ on debts owed by airlines to agencies such as Nigerian Airspace Management Agency (NAMA), Federal Airports Authority of Nigeria (FAAN), and Nigerian Civil Aviation Authority (NCAA), with the final percentage to be determined by the presidency.
“A generous discount on debts owed to agencies such as the Nigerian Airspace Management Agency (NAMA), Federal Airports Authority of Nigeria (FAAN), and the Nigerian Civil Aviation Authority (NCAA) is under consideration,” he said.
The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, said a meeting would be held with oil marketers on Thursday to address pricing concerns.
Speaking on behalf of AON, the Chief Executive Officer of Air Peace, Allen Onyema, requested a total waiver of debts owed by airlines.
Mr Onyema also urged the federal government to strengthen the Bank of Industry, BOI, to enable airlines access loans at lower interest rates.
He described the reported 300 per cent increase in aviation fuel price as abnormal and called for caution by oil marketers.
The Airline Operators of Nigeria (AON) were forced to threaten the suspension of the operations over escalating fuel costs, which rose from N900 per litre in late February to about N3,300 per litre, an increase of more than 300 percent.
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