Nigerian Airline Operators Advocates For Better Economic Policies

The Airline Operators of Nigeria (AON) has called on the Federal Government to come up with friendly economic policies that will position domestic airlines in taking competitive advantage of the huge business potential in the nation’s aviation industry.

The operators lamented that apart from the infrastructural deficiency that leaves 17 airports languishing with scanty flight activities, the airlines are milked dry by regulatory agencies through Value Added Tax and 5 percent Ticket Service Charge(s), a situation they described as the bane of air travel in the country.

Speaking during a meeting held on Monday with the Vice President, Yemi Osinbajo, at the Presidential Villa, Abuja, Chairman of AON, Capt. Nogie Meggison said it was disturbing that domestic airlines were the only ones still paying VAT in the country. According to him, other transportation channels — Marine, Road and Rail – do not pay VAT, including their foreign counterparts.

The chairman wondered why the government would allow such a discrimination to exist to the disadvantage of the domestic airlines while the foreigners are given free access to operating without VAT.

He demanded that the domestic airlines should be given a level playing ground along with their foreign counterparts by removing VAT.

Other demands mentioned by the Captain include a review of 5 per cent TSC, harmonization of 35 multiple charges, upgrade of Navigational and Landing Aides, and measures that will tackle high cost/epileptic supply of Jet-A1.

Along with these demands, Nogie urged the government to formulate policies that will make the airlines flourish and position the country as an aviation hub in Africa.

“There is an urgent need for a deliberate economic policy that will support the positive growth of aviation and survival of domestic airlines in the country. For instance, following the air crashes of 2005/06, the government came up with a policy to ensure air safety. Similarly, the economic policy for the sustenance of the industry needs to be seriously looked into.

“Safety and Economic policy go hand-in-hand. Where there is no financial profit for airlines safety would be compromised. A clear economic policy for the survival of domestic airlines is very critical at this time which has resulted over the years in the death of over 25 airlines in 30years. Safety and Financial Economic Policy must go hand-in-hand; as airline investors are in the business of aviation for the profit and can’t make a profit without safety or have a safe airline without profit,” he said.

He added that lack of consultations with airlines before the introduction of new charges and policies, among other contentious issues, also posed a stumbling block to the growth of the airlines.

According to him, apart from obsolete infrastructure limiting operations to daylight operation as most airports don’t operate at night, no domestic airline flies the required average of 10 hours per aircraft daily. He said all the airlines operate an average of 5 hours only per day against the required average.

Having carefully listened to the airline operators, the Acting President acknowledged the difficult situation the airlines face and promised to take a closer look at the various issues raised in order to find ways of addressing them.

He assured of more friendly policies that will promote the ease of doing business in the airline industry as well as position Nigeria to take advantage of her natural geographical location as the hub in Africa.

According to him, he used the meeting as “a fact-finding exercise to hear firsthand from the airline investors what domestic airlines are going through within the sector and to discover why, in spite of the huge population and other business potentials available in the country, there were still lamentations about cost of fuel, charges and obsolete infrastructure.”

Osinbajo made a solemn appeal for patience and understanding, assuring the operators that government will take necessary actions to address their demands in due time.

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