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The nation’s aviation sector is in deep crisis. It can no longer be masked. The local airline operators, the customers and other stakeholders are complaining of one thing or the other over the state of Nigeria’s aviation sector. While Nigerian carriers complain of rising prices of aviation fuel, also known as Jet A1, multiple taxes, sundry charges, aircraft maintenance costs, insurance costs, airfare war and dwindling patronage, the customers or flying public complain of exorbitant airfares, delayed flights, cancelled flights and poor service in some cases. Other stakeholders say that the sector still grapples with infrastructure decay and inadequate navigation equipment and manpower challenge. They opine that no airline can survive under the excruciating business climate.
The problem of the sector is now being compounded with the entry of state-backed airlines bankrolled with taxpayers’ money. Most of these airlines promoted by state governors were not essentially established to make profit. There may be other ulterior motives behind their establishment. They are the ones engaging in unrealistic airfare war, targeted at crippling the private airlines. We shall return to this theme later in the article. We wonder why some state governors who could nor even pay the national minimum wage of N70,000 per month are all rushing to build airports and establish airlines.
Some of these governors have poor rate of internally generated revenue (IGR) and can hardly meet their monthly obligations and can’t even guaranty safety of their citizens, yet they are now obsessed with building airports and setting up airlines, a capital-intensive business that does not employ so many people and cannot even make huge profits. The experience of the defunct Nigeria Airways has demonstrated that state-run airlines are not profitable. They are parasites of state resources.
At a period the emphasis is on the promotion agriculture and the non-oil sector, which will generate both revenue and employment and ensure food security, some of the governors are deeply engrossed in building airports , even where not necessary and setting up airlines that are hardly patronized. The rationale for establishing these airlines which has no backing of the people of the state must be urgently scrutinized by the concerned authorities. This frenzy on airline business by state governors must be investigated.
Some of the governors that are yet the existing airport in their state are even rushing to build another one. Anambra State is a case in point. Does Anambra with small land mass truly need two airports? The answer can never be in the affirmative. Anambra has the worst case of gully erosion in the country. It is high rate of unemployment. Its agricultural potential is yet to be fully tapped. Its governor, Prof. Charles Chukwuma Soludo, promised to develop the state and make it Africa’s Dubai, Taiwan and Silicon Valley. Soludo is in his last term, yet the Dubai, Taiwan and Silicon Valley dream is still in the pipeline. Apart from demolishing parts of Onitsha Main Market, Soludo’s next obsession is building a new airport in Aguata and floating of Anambra Air, a needless economic jamboree.
In a recent interview with Arise Tv, Chief Allen Onyema, the Chairman/CEO of Air Peace and Vice-President of Airline Operators of Nigeria (AON) bemoaned the rising operating costs of the nation’s carriers and warned that the airlines may collapse if the challenges facing the operators are not quickly and pragmatically addressed. Onyema lamented the rising cost of aviation fuel, which he blamed on the Middle East crisis and having so many middle men in the supply chain. At over N3,000 per litre for Jet A1, the airline business is bound to collapse due to lack of profit. No airline can thrive with unbearable cost of aviation fuel. With 70% of air ticket bought being swallowed by taxes, the airlines are just struggling to be in business. The situation is unacceptable and must be reversed forthwith before it is too late.
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He also decried multiple taxes imposed on the operators as well as sundry charges that make the business unsustainable. Under the present circumstances, the private airline operators can hardly make profit. This can explain why Onyema called on the federal government to set up aviation tax review panel. The panel will enable the airline operators meet with President Bola Tinubu and the Minister of Aviation, Festus Keyamo (SAN) and other stakeholders to holistically address the challenges confronting the sector.
Rwandan President Paul Kageme recently called for reduction of multiple taxes and charges in Africa at a conference in Lome, Togo. The federal government must as a matter of urgency address the multiple taxes and charges the nation’s carriers grapple with presently. Without promptly addressing these crippling taxes and charges, the existing Nigeria’s airlines may collapse. In a country with high mortality rate of airlines, their collapse will be calamitous for the nation’s aviation sector and our tourism sector as well.
The current tax regime in the sector will reduce the lifespan of commercial airlines in the country to 10 years, thereby increasing the mortality rate. Some aviation analysts have put the number of collapsed airlines in the country at 70. We hasten to add that it could be more. The government should intervene in the aviation fuel pricing and reduce the long chains of middle men that now exploit the airlines with high price of the commodity.
With rising security challenges which were exacerbated by unbridled kidnapping and abduction of Nigerians in schools and highways, Nigerian roads are becoming unsafe for many travelers. Arising from this predicament, more Nigerians are now using flights to reach their destinations and escape kidnappers, armed robbers and other criminals. However, with the exorbitant airfares and the survival crisis facing the airlines, the air travelers are in dilemma.
The government should reduce this burden by reviewing the taxes and charges imposed on the airline operators. It should also address the intractable security challenges facing the country. The government should also review the rush and the eagerness by state governors to build airports, whether necessary or not, and establish airlines. Let them use that zeal to establish farms for their unemployed youths and others to grow food and cash crops, earn foreign exchange and boost the nation’s food security.
