Denied credit for aircraft maintenance and flight operations, more airlines are grounding their planes as the credit crisis biting the various sectors of the nation’s economy took a toll on the aviation industry.
Many passengers were stranded following airlines’ failure to operate flights.
Airlines had in the past two days grounded flights as they were denied the usual credit line by oil marketers which have now adopted cash and carry basis for the supply of aviation fuel (Jet A-1) to airlines.
Mostly affected are the local airlines whose credibility had been dented by their failure to honour previous agreements on credit while the international airlines still enjoy credit facilities because their integrity are guaranteed as they usually pay at the expiration of the credit tenure.
Some local airlines also get credit facilities of between two weeks and 30 days, depending on the level of business relationship with oil marketing companies.
According to the chief executive officer of one of the major oil marketing companies, who spoke with BusinessDay, airlines owe his company N2.1 billion, forcing it to suspend long term credit for the airlines especially the local ones because they also get credit to import aviation fuel.
“There is no way the banking crisis would not affect other sectors of the economy”, he said.
Bellview Airline, for example, had since Monday repeatedly cancelled scheduled international flights between Lagos and London as a result of the crisis.
In one of such cancellations, some of the passengers had arrived very early for the morning flight but were disappointed when the officials started giving out N10,000 to each passenger for inconveniences.
The passengers, who went wild demanded refund of their money and threatened to disrupt activities at the MMIA if they were not flown or rebooked.
Men of the Police force were however drafted to the departure area to calm the situation which was already degenerating.
The airline, it was learnt, is having difficulties sourcing funds to service its airplanes which were due for maintenance and could not lease alternative airplanes pending when the one due for maintenance is serviced.
In the wake of the crisis, BusinessDay gathered that the operational funds of the the airlines are being eroded as both the airlines and their promoters have diverted available funds to repay old loans. “As we speak, Aero Contractors is concentrating on paying its debt. Chanchangi and IRS Airlines are also paying debts owed some of the rescued banks while Virgin Nigeria is battling to pay GT Bank,” a source volunteered at the Lagos airport yesterday.
Meanwhile, Harold Demuren, director general, Nigerian Civil Aviation Authority (NCAA), told BusinessDay that a meeting of aviation fuel marketers and airlines would be held to discuss modalities of payment of the debt with a view to finding a solution to the crisis.
While noting that the decision of the marketers to resort to cash and carry basis would completely ground the airlines’ businesses, he said the airlines must be credit worthy adding that the authority will not fold its arms and watch the crisis persist.
Sep42009