Unfavourable operational environment, high airport charges among others are some of the factors responsible for the demise of over 100 domestic airlines in Nigeria in the past 20 years, according to the Managing Director of Overland Airways, Captain Boyo Edwards.
This is just as Sen. Hadi Sirika, the Minister of Aviation has insisted that lack of corporate governance, poor funding and sound business models were responsible for the early death of most of the nation’s airlines.
According to independent.ng, Sirika also narrated how an unnamed domestic airline lost about $20m to acquisition of two aircraft in recent time.
Speaking at the third day of the three-day Public Hearing on the amendment of the Civil Aviation Amendment Bills of the six aviation agencies in Abuja, Boyo regretted that the unfavorable operating environment had led to death of airlines and loss of jobs for qualified personnel in the sector.
Boyo explained that no fewer than 35 charges are imposed on the airlines by various government agencies even outside the industry.
According to him, the airlines are charged Ticket Sales Charge (TSA), Cargo Sales Charge (CSC), Value Added Tax (VAT), N2, 000 Airport Tax, Landing fee, Parking fee, Navigation fee, Terminal charges, Security taxes, Fuel surcharges, Handling charges, Corporate income tax, and fuel tax amongst others.
He said: ”Airlines in Nigeria are victims of the environment created by laws. Some of the laws were promulgated possibly when we were comfortable doing so. We must look at a way of bringing down costs to the airlines. Our airlines are suffering today.
”Why are airlines dying in Nigeria? Over 100 airlines have come and gone in Nigeria in the past 20 years. What are the efficiencies of these agencies? Are the airlines to pay for the inefficiencies of these agencies? Very soon, there may not be any airline again in Nigeria.
”Sir Richard Branson of Virgin Nigeria came into Nigeria aviation industry a few years ago. He was successful everywhere, but failed in Nigeria.”
Boyo also canvassed for abolition of navigation charges for domestic airline operators, but said terminal charges could be remained.
Responding, Sirika, said that most airlines in the country close shop due to lack of corporate governance, inadequate funding and poor business models of the airlines.
Sirika expressed that a particular airline in the country lost about $20 million to acquisition of two aircraft.
He explained that most of the sponsors of the airlines lack knowledge about the industry, yet refused to learn the rudiments of the sector.
Sirika also hinted that the charges collected by the airlines were recognized by the International Civil Aviation Organisation (ICAO), and charged the operators to use right equipment for their routes.
He said: ”Our airlines should operate the right equipment for their routes. Most of them lack adequate planning for their operations. I know of a particular airline operator who lost about $20m on two aircraft. That’s the truth. The person lost $20 million right in my own eyes. Also for an operator to access loans at 25 per cent interest, it is killing.”
Besides, Capt. Rabiu Yadudu, Managing Director of the Federal Airports Authority of Nigeria (FAAN) said that the amendment of the existing FAAN’s Act was necessary.
He recalled that the existing Act came into being in 1999, stressing that several changes and developments, which had since taken place in the sector made the the current Act obsolete.
Like Sirika, Yadudu declared that the charges imposed by the airlines are recognised by ICAO and so should remain.
Besides, Capt. Musa Nuhu, the Director General of NCAA, in his comment, emphasized that levies collected by the agencies were arrived at in agreement with the stakeholders and airline operators.
He pointed out that in order to check non-remittal of charges by airlines, NCAA established a portal for reconciliation of of charges, but noted that most of the airlines refused to come onboard the portal.
He, however, threatened that NCAA may sanction erring carriers very soon.
Sen. Smart Adeyemi, Chairman, Senate Committee on Aviation called on the airlines to use right equipment for the right routes.
