New capital base for airline operators

Proshare

May 26, 2006/vanguard

 

 

 

The Federal Government announced, yesterday, a compulsory capitalisation policy for airline operators the minimum being N500 million for those plying domestic route. N1 billion is for regional and N2 billion for international routes. The capitalisation affects the existing companies and those willing to join the industry and they have up to March next year to recapitalise.


Briefing State House correspondents on the weekly meeting of the Federal Executive Council, Minister of Information and National Orientation, Mr Frank Nweke, also announced the approval of about N6 billion (38 million Euros and N300 million) for the immediate replacement of obsolete equipment in control towers nationwide. He said the sum of  N19.5 million had been earmarked for the immediate rehabilitation and upgrading of the Lagos, Abuja, Port Harcourt and Kano International airports.


Until now, the paid up share capital for the holder of an air transport licence was N20 million, air travel organisers licence, N2.5 million and air operating permit N20 million for local and international routes.
Nweke sai the new policy arose from the deliberation by the Council on the draft white paper of the Presidential Task Force on the aviation industry set up in December 2005 by President

Obasanjo at an emergency stakeholders’ meeting. The meeting took place after air crashes that took place in the country late last year.

The Information Minister said the council meeting took a clinical look at the white paper and the committee headed by the Minister of Aviation, Professor Babalola Borishade. A total of 122 recommendations were made by the committees to address the decay in the aviation industry.

Prof. Borishade also said new and competent hands from the private sector had been recruited to replace those that were either not properly trained or were incompetent.

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