Nigeria to bail out struggling airlines

Nigeria to bail out struggling airlines

Nigeria’s central bank is extending a US$3.3bn bail-out to its struggling aviation industry.

The fund, first announced in March, was originally aimed to stimulate credit to the energy and manufacturing sectors. However it is now being extended to Nigeria’s aviation industry, as a number of carriers have sunk heavily into debt due to the aggressive expansion and the rising price of oil.

“These airlines can now partake from the fund and those that are indebted to banks can refinance their loans and amortise them over a period of ten to 15 years,” the spokesman for the Central Bank of Nigeria, Mohammed Abdullahi.

“This we believe will help put off a feared financial crisis in the aviation industry.”

Competition within Nigeria’s airline industry has intensified in recent years, particularly on domestic routes, with new carriers such as Arik Air and Dana Air competing with older firms such as Aero Contractors and IRS Airlines.

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Virgin Atlantic has said it is looking to sell its 49 percent stake in Nigerian Eagle Airlines, formerly Virgin Nigeria.

Nigerian Eagle Airlines suspended its loss-making long-haul routes to the UK and South Africa last year to focus on domestic operations. http://www.breakingtravelnews.com/images/uploads/transport/arik-air-gambia.jpg