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Nigeria’s Central Bank extends USD3.3bn bailout for domestic carriers

1-Jun-2010 12:39 PM

Nigeria’s Central Bank announced it has extended a USD3.3 billion bailout for the country’s domestic carriers (Associated Press/BBC News/AllAfrica, 31-May-2010). The fund will allow carriers to refinance their loans for 10 to 15 years. The bank stated the decision was made over its concerns about the heavy debt of the industry and the need to allow carriers to plan the settlement of their accrued loans. It considers the heavy debt profile is a risk to these banks and the banking industry. The Nigerian aviation industry consists of 21 registered operators with valid air operation certificates, 10 of which are commercial carriers and 11 are charter and cargo carriers. Of the commercial carriers, three are grounded, while seven are experiencing difficulties. The seven still in operation include Arik Air, AeroContrator, Associated Aviation, Chanchangi Airlines, Dana Air, IRS Airlines, Overland Airways and Virgin Nigeria. The carriers owe the Federal Airports Authority of Nigeria (FAAN) USD59.5 million, Nigerian Airspace Management Agency (NAMA) USD13.2 million and ground handling operators, Skyway Aviation Handling Company Limited, SAHCOL and Nahcoaviance more than USD19.8 million.