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COVID-19: Travel agencies appeal to FG for interest-free loans

COVID-19: Travel agencies appeal to FG for interest-free loans

Amidst the negative impact of Coronavirus on the revenue of Aviation industry in Nigeria, Travel agencies in the country are in dire need of financial aid to remain operational and not lose their International Air Transport Association (IATA) licensees. NAIRAMETRICS reports

Why it matters: The travel agencies have been recording decline in ticket sales and reservations for international and continental flights. Nairametrics had reported that the agencies experienced 50% drop in ticket sales and reservations for international routes, and with a recent statement from the agencies body, financial incentives are needed to survive the challenges brought upon them by the Coronavirus pandemic.

IATA had disclosed that International bookings in Africa are down roughly 20% in March and April, domestic bookings have fallen by about 15% in March and 25% in April.

President, National Association of Nigeria Travel Agencies (NANTA), Bankole Bernard, explained that some businesses are on the edge of collapsing if the government doesn’t intervene with soft loans.

He said the operators need interest-free loan to enable them keep their IATA license.
Bernard also stated that the IATA needs to help deter the payment period for their license, “NANTA is putting a position to IATA to look at how we can defer our payment from the mandatory two weeks window to a month and above.

“Therefore, we need the government’s support in form of bailout granting us access to soft loans in the form of interest-free loans and overdrafts to enable us to meet up with our obligations to IATA. Our IATA license is at risk if we are not able to remit to IATA and we have never got into default and we don’t want to go into default.”

Bad time for aviation business: Air transport business going through a decline in Nigeria, so the plea from NANTA is expected as the country’s Aviation Industry has been projected to lose N160.58 billion and 2.2 million jobs in 2020 as the Corona virus continues to spread. The confirmed cases of Corona virus in Nigeria is now 25, while two have been discharged.

But the challenge isn’t limited to Nigeria alone, as the Aviation Industry in Africa and globally is losing revenue to the pandemic. African airlines had lost $4.4 billion in revenue as of March 11, 2020. And the African industry has been projected to lose more.

While in the International Aviation market, airlines are also experiencing revenue loss, one of which is Lufthansa. The airline reduced all passenger flights by 95%.

Chief Executive Officer of Lufthansa, Carsten Spohr, said, “The longer this crisis lasts, the more likely it is that the future of aviation cannot be guaranteed without state aid.
“The spread of the corona virus has placed the entire global economy and our company in an unprecedented state of emergency. At present, no one can foresee the consequences.”

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