North-East governors commits on new regional airline to grow IGR
AREWA AGENDA – Governors of the North-East region have began plans to establish a regional carrier, North-East Regional Air Shuttle Limited, which would compete with other domestic airlines and hopefully raise the Internally Generated Revenue (IGR) for the states.
The North-East states comprise Adamawa, Bauchi, Borno, Gombe, Taraba, and Yobe. The six states record the least IGR among the regions within the country.
But the governors in the North-East region are now seeking new revenue sources to boost their quarterly and yearly revenue generation, which was N42.91 billion as of First Half (H1) 2020, according to data obtained from the National Bureau of Statistics (NBS), compared to South-West’s and South-South’s N385.41 billion and N156.17 billion respectively.
North-East states post the lowest IGR, with Yobe State reporting N4.03 billion, Adamawa State N6.08 billion, Bauchi N9.46 billion, Borno N9.81 billion, Gombe N5.44 trillion and Taraba N4.77 billion.
The Borno State Governor, Umaru Zulum, who stands as Chairman, North-East Governors’ Forum, believes the regional airline will lead to the development of the region’s business environment, which could also raise tax revenue.
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While he didn’t provide much details on the regional airline, Zulum, during the North-East Governors meeting held the over weekend, said conclusion on financial and technical requirements will lead to the establishment of the North-East Regional Air Shuttle Limited soon.
“Our decision to float a commercial airline, known as the North-East Regional Air Shuttle Limited, for the region is also coming to fruition as soon as a number of financial and technical requirements are met,” Zulum said.
With insecurity on road disrupting trade activities in the regional, the governors are turning their sight to air travel three years after the Akwa Ibom Government flagged off its state-owned air passenger carrier, Ibom Air, in June 2019, which is increasing the state’s revenue through 708 scheduled flights per month.
A year before Ibom Air was launched, Akwa Ibom reported N24.21 billion in Full Year 2018, however, a year after it was created, the state generated 74.7% of 2018 FY IGR in the first six months of 2020, N18.09 billion.
The growth in Akwa Ibom’s IGR could be replicated in the North-East region’s IGR if the North-East Regional Air Shuttle Limited takes flight, but with the states in the region experiencing insecurity due to Boko Haram and Bandits attacks, and the latter already showing its ability to infiltrate Nigerian airport, as done in Kaduna airport in March 2022, preventing flight operations, the North-East Regional Airline faces threat.
Source: Ripples Nigeria
