Business

Nigerian airlines to get bail-out

Arik Airlines plane
Image caption The number of Nigerian airlines has grown with the likes of Arik Air emerging

Nigeria's central bank is extending a 500bn naira ($3.3bn; £2.3bn) bail-out to its troubled airlines.

The fund, first announced in March, was originally meant to stimulate credit to the power and manufacturing sectors.

The country's aviation industry, already hit by higher fuel costs, has grown rapidly in recent years and many airlines are heavily indebted.

In August 2009, the Central Bank of Nigeria also injected 400bn naira to rescue five banks.

'Avert crisis'

"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 bank's spokesman Mohammed Abdullahi said.

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

Virgin Atlantic has said it is looking to sell its 49% 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.

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