Nigeria’s Acting President Yemi Osinbajo has vowed to address the issues that are keeping the country’s aviation sector from growth and development.
Osinbajo made the vow in a meeting with a delegation of Airline Chief Executives of the Airline Operators of Nigeria (AON) in his office in Abuja over the weekend.
The challenges that were identified include insufficient supply and high prices of aviation fuel, difficulty in accessing forex, non-establishment of maintenance, repair and overhaul facility in the country, poor airport infrastructure and high taxation.
Osinbajo also acknowledged that his country had failed to take advantage of their ideal geographical location to become an air transport hub for Africa but promised that the federal government would start tackling these problems.
He said he has already inquired why, in spite of the country’s huge potential owing to its airports located at approximately sea level and being the sixth largest producer of crude oil in the world with a population of a 190 million people, Nigeria has not become an active aviation center for African travel.
After listening to the AON representatives, the acting president admitted the challenging situation the airlines face and swore to take a closer look into the various issues raised.
AON Chairman Nogie Meggison said some of the major issues facing airlines include the imposition of Value Added Tax (VAT) (as domestic airlines are the only mode of transport paying VAT – Marine, Road, Rail and even the International airlines don’t pay VAT); harmonization of over 35 multiple charges and reviewing the 5% Ticket Sales Charge (TSC) to a flat rate (in line with the world practices).
Meggison also cited poor navigational and landing aids, high cost of supply of aviation fuel, obsolete infrastructure, limited operations to daylight operation for most airports (Nigerian airlines fly an average of only five hours as against the average of 10 hours worldwide per airplane) and lack of consultations with airlines before introduction of new charges and policies among others.
“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 2005-2006, 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 30 years. 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 profit without safety or have a safe airline without profit”, Meggison said.
He explained that this was one of the main reasons why airlines in Nigeria have such a short lifespan, with carriers averaging an estimate of eight years.
Meggison stressed that Nigeria has the same four major catalysts that transformed Dubai from a desert into a hub in the Middle East today.
“Aviation is an economic driver; therefore, we believe aviation should be supported as much as possible to thrive in order to reap its many benefits that can easily make aviation a major contributor to the GDP and to create 200,000 new jobs for our ailing youths through its direct and indirect link. Hence, rather than inflict greater burden on aviation, things should be made easier”, the AON Chairman said.