Chinedu Eze
The Chairman and CEO of Air Peace Limited, Dr. Allen Onyema, declared that the designation of Nigeria by the International Air Transport Association (IATA) as the worst place in the world to establish airline business would be a thing of the past the minute the President gets to know the factors that led to such designation.
He expressed belief that the financial crisis bedevilling the airlines over the 5 per cent Ticket Sales Charge (TSC) will be solved by the intervention of President Bola Ahmed Tinubu.
In his Keynote speech at the 30th annual conference of the League of Airport and Aviation Correspondents (LAAC) held in Lagos yesterday, with theme: ‘Towards a Sustainable Aviation Industry: Balancing Government Revenue Demands with Sector Growth’, Onyema said that what will put to an end the high mortality rate of Nigerian operators is when there is amicable tax and charges system that protects the airlines, aviation agencies and the travelling public in a win-win situation.
He noted that the current system where airlines pay 5 per cent of the cost of each flight ticket to the Nigeria Civil Aviation Authority (NCAA) is fiscally constricting the operators and advocated that government should introduce a fixed flat rate on the ticket to make it easy for the airlines to pay and also save them from going under.
He said that this is why the airlines yearn for the intervention of President Tinubu who is a listening President and recalled how the President waived 4 per cent Free on Board (FOB) levy, a statutory charge introduced by the Nigeria Customs Service, for the airlines.
Onyema, who is also the Vice President of Airline Operators of Nigeria (AON), said that when the matter came to President Tinubu, he immediately exempted the airlines from payment of the levy within 24 hours.
He said, “One thing I must say is that I’m certain any day President Bola Ahmed Tinubu sees us, if they allow us to see him, because I know he will not mind to meet with us, that will be the day a new revolution in the airline industry in this country will occur because Mr. President abhors anything capable of affecting indigenous businesses that provide jobs for the people adversely.
“I remember when we complained to the Comptroller General of Customs, Mr. Adewale Adeniyi of the debilitating effects of the newly introduced 4 per cent FOB customs duty on airlines. He, Wale Adeniyi, took it up with the Presidency same day. I was there in the Presidential Villa with the Customs boss, a fantastic man. This President acted swiftly and waived it for airlines within hours of being made to understand the would-be effects of such a charge on the viability of indigenous Nigerian airlines.”
“The customs boss is a man who thinks about the overall well-being of the country, not just revenue. He asked me, ‘Is it going to hurt airlines?’ I said, ‘We are already bleeding. This 4 per cent will hurt us’. He said, ‘Okay, let’s go see the President’. This man helped to save Nigerian airlines. Within 24 hours, the 4 per cent was removed. That is the power of listening. President Tinubu is a listening President.
“The problem is that the President has not heard from us on why his country was so described by IATA who equally compared Nigeria to Afghanistan.
“When he does see us, aviation will flourish in this country. It will benefit the agencies, the government, and the flying public.”
Onyema also recalled that he promised to create 1,000 jobs for Nigerians after the President removed airlines from paying the 4 per cent FOB levy. 78,000 Nigerians applied for the job and from that number 1,000 young Nigerians were employed as he promised. The interview was held at the University of Lagos Auditorium.
The Air Peace Chairman reiterated that Nigerian airlines will not grow if they continue to operate under numerous taxes and charges which is what is currently their situation.
He said that if the Ticket Sales Charge is made a specific amount of money attached to the ticket, it will help the airlines and it will even benefit NCAA, the other aviation agencies, the flying public and more in the long run.
He also reiterated the reports, which indicate that no fewer than 62 commercial airlines have collapsed or gone default in Nigeria since independence in 1960. With over 22 shutting down in a recent 24-year window due to high tax burden, which are too many.
“At several aviation fora, IATA has identified Nigeria as one of the most expensive countries in the world in which to operate an airline, citing high operational costs that continue to challenge the viability and growth of local carriers.
“The Association has reiterated that the high-cost environment has made it difficult for Nigerian airlines to remain competitive and profitable, limiting the sector’s ability to reach its full potential. They wondered how Nigerian airlines survive and even compared Nigeria to Afghanistan, which is not good for our country’s image,” Onyema added.