By Chinelo Obogo, [email protected]
The exorbitant taxes, charges and high cost of air fares are among the major challenges confronting Nigeria’s aviation sector with very little progress being made to checkmate them.
At different times for instance, domestic airlines have had to defend the high cost of ticket fares on the multiple charges they pay aviation agencies, as well as cost of jet A1, forex scarcity, devaluation of the naira among other issues.
But last week at the Aviation Safety Round Table Initiative (ASRTI), business breakfast meeting where stakeholders brainstormed on the way forward, stakeholders including, the Head of Research and Corporate Travel at Zenith Travels, Olumide Ohunayo, President, National Association of Nigeria Travel Agencies (NANTA), Susan Akporiaye and Chairman, National Association of Aircraft Pilot and Engineers (NAAPE), Dana Air chapter, Peter Duniya, spoke to Daily Sun at the sidelines of the meeting proffering solutions on how this can be resolved
Among their submissions was that the Federal Government should give its 100 per cent support to domestic airlines to produce a flag carrier
According to Mr Olumide Ohunaya “We need to have this interface with policy makers and if we do not, we would continue to have this problems of multiple charges, some of which are actually extortions that come under the name of charges. This is not something that we can handle alone, everyone must have to join hands to make the sector work. I can assure you that the ART under the leadership of our president and other stakeholders will be able to come together, move to the Ministry of Aviation and take bold decisions for the industry so that we would not have to come back next year to be talking about these problems.
“As at today, it is so sad when you look at the high cost of ticket fare and how Nigerians are going to other countries to get lower fares is a situation that we need to reverse. We have heard about the millions in trapped funds, devaluation of the naira and we know how aviation products are delivered in dollars and for you to get anything, you have to get it in dollars which definitely affects cost of operation and in turn also affects the cost of tickets. The easiest way is take care of the issue of high cost of ticket fare is to increase competition. Nigerians have a high demand and taste, we must go for graduation, we must go for capacity building, but then, if our bilateral agreement gives provision for reciprocity and we cannot reciprocate using Nigerian airlines, then increase the frequency of other airlines. If we keep on rejecting and we are not participating, then Nigerians will suffer. Whether it is private, flag carriers or national carriers, we would need to step up and use our BASA agreements. I am happy that Emirates is returning, but it is not a Nigerian airline and the benefits are not coming to us besides a possible reduction in fares.
“We need Nigerians to be able to lead this process. Air Peace, United Nigeria and all other domestic airlines must see how they can work together to produce a very strong flag carrier that can take up this position. We can’t keep waiting. We can’t keep bringing in others and our own airlines are not going down. Nigerian airlines should be supported by the government because what has been happening is that after designation, everyone goes back and the airlines are left alone. But when you designate and you follow through, it would be more effective. If the Ministries of Aviation, Foreign Affairs and Justice stand strongly and protect them and say ‘This is our flag carrier’, there would be a difference. Our airlines should not be carrying files round offices alone and they should not be looked down upon and say, this airline belongs to Mr. A or this airline belongs to Mr. B, so you will not help them. It should not be so.”
Airlines have not been honest on reason for high cost of tickets –Akporiaye
“Why is airfare becoming very expensive? When you put airlines on the spot, they will tell you that they cannot discuss fares. If you look at every fare, there is what you call the base fare and taxes. The base fare is one of the smallest in the entire ticket, so you ask yourself, how come the total is still expensive? You have a local ticket were the base fare is N10, 000 for instance and after all the taxes, the total is N60, 000, meaning that taxes alone is N60, 000. There are some taxes we see on tickets and we have been asking questions about it for as long as we can remember and no one can explain to us what that tax is for. Once you ask the question, the airlines will tell you that they are not allowed to discuss fares.
“If you notice, from history, every last quarter of the year, local airlines increase fares for absolutely no reason. Did anything drastic change? Why have the tickets gone up? It means that the airlines deliberately increase fares every last quarter of the year starting from November but by January, the fares will come down. I want to look at it as an issue of demand and supply. They know that there is high demand during the last quarter of the year. They are not the only ones that do this, international airlines also do it because there is demand during peak periods and all the airlines add to their fares. They would tell you they are following the law of demand and supply.”
Airlines are burdened with multiple charges, taxes –Duniya
“The industry needs the support of the Federal Government to survive. On the issue of high cost of tickets, if you consider the multiple charges and taxation on airlines, you would see that they are also not finding things easy. These charges are stifling them of the income they are earning. The Ministry of Aviation, the National Assembly, aviation agencies, the unions and stakeholders in the industry like ASRTI need to work through this to resolve this very germane issue.
“Another challenge is that the industry is run with dollars, then you have cost of jet A1 and high cost of maintenance. Many aviation companies make little profit yet the cost of operation is very high because of some of these issues I mentioned. Some of these taxes are taking over 50 percent of the ticket cost and at the end of the day, they struggle to make profit.”