Nigerian banks’ still reluctant in lending to domestic airlines—Aero Contractors boss
The Chief Executive Officer, Aero Contractors, Capt. Ado Sanusi, has again, revealed that whereas indigenous airlines continue to make frantic efforts to remain in business, they have continued to be impaired by the technical blockade in funding by local banks.
In a media chat with select media executives in Lagos, Sanusi called for early re-engineering of financial support system in the aviation industry in general, revealing that “I don’t think the financial institutions have supported the industry the way they are supposed to. The industry is high risk and low profit and we need long-term loans with low interest rate for us to break even.”
Agreeing that accessing any form of financial support from the banks remains nearly impossible because of the current receivership status of Areo, Sanusi argued that even others without any form of fiscal stress cannot get any meaningful support from the banking money market.
Though industry experts say Air peace may have been lucky to some extent considering series of financing deals sealed with Fidelity Bank which have been generally successful.
Apart from deepening fleet base, Sanusi noted that there are so many aspects of funding needs for local airlines including hanger and even the support services in the industry.
According to him, “The fear of financing aviation because of what has happened in the past and how airlines have gone under may be driving the lack of interest from financial institutions or making them to be a bit wary of giving financial support but I think if someone has a good business case, it can be financed by financial institutions.
“Aviation is quite expensive as one aircraft can cost up to $200m and you can imagine if you change it to naira, but funds can come globally through partnerships,” he said.
Giving a general insight on the state of the nation’s aviation industry, Sanusi averred that “In the area of infrastructure, things have been done but I don’t think we are where we should be. I think there has been movement towards that direction. In the area of regulation, a lot has been achieved but a lot needs to be done,” Capt. Ado Sanusi highlighted.
