FG Raises Airlines Capital Base
 23rd JAN 2007

The Federal Executive Council (FEC) on Wednesday approved rises in the capital base of airlines to ensure operational stability and safer skies. Domestic route operators are to recapitalise to N500 million, against the old rate of N20 million. Regional routes (Africa and pilgrimage) attract N1 billion, up from N500 million. Intercontinental and international carriers require N2 billion instead of the current N1 billion.

The approval is sequel to the recommendations of the Panel on Aviation Reforms, led by the Chief of Air Staff, Paul Dike, which submitted its report to the FEC. The new rates take effect from April. Defaulters will have their operations grounded.

Minister of State for Transportation (Aviation), Femi Fani-Kayode, told reporters in Abuja on Wednesday that the new tariff tallies with that of India, one of the several countries whose rates were considered by the committee. The capital base would strictly be paid up in full by the operators as there would be no room for misleading financial documents. Besides, the tariff will be reviewed upwards periodically.

Other requirements approved include the installation of Ground Proximity Warning System (GPWS) in every aircraft as well as comprehensive security screening clearance of intending operators.

Each operator must be certified by the Nigeria Civil Aviation Authority (NCAA) to have the technology to run operations.

Fani-Kayode said the latest measures are the first step of many to be taken to sanitise aviation business in the country.

He explained that the "small and unacceptable" capital base of operators had resulted in poor services and substandard safety records.

Back to Top
Post Your Feedback