…as IATA harps on conducive operating environment for airlines, laments high charges, taxes
Against the backdrop of making Nigeria the Aviation hub of Africa the federal government has revealed its plans to attract foreign investors in order to improve aviation business in the country.
Minister of Aviation and Aerospace, Festus Keyamo, disclosed this while opening the 7th African Aviation Summit & Exhibition ongoing at the International Conference Centre, Abuja.
Keyamo said that the vision of the current administration was to make Nigeria the Aviation hub of Africa.
He said the government is already looking at certain areas to improve aviation business in Nigeria which include upgrading infrastructure.
In this regard, the Minister said the following were in the pipeline; upgrading of the Cat3 landing system at major airports, construction of the second runway in Abuja, airport improvement programmes through concession and government willingness to partner with companies to turn major airports into Aerotropolis.
Keyamo disclosed that the government was also considering setting up an Aircraft Leasing Company as the government welcomes major players in aircraft leasing and head lessors to invest in Nigeria airlines to provide state of the art aircraft.
“Government will ensure enforcement of contract agreement and the rights of investors and indeed all parties are protected; and Nigeria being a signatory to the Cape Town Convention will uphold international obligations,” he assured.
Also being considered according to him, is the establishment of an Aircraft Maintenance Organisation, noting that “Maintenance, Repair, and Overhaul (MRO) facility is another critical aspect that can make the Nigerian aviation industry a hub on the continent.”
He pointed out the challenge of shortage of qualified engineers saying that the current administration is willing to provide all the necessary support for the establishment of world class MROs and training organisations.
On the problem of forex availability which has been a bane in the industry, the Minister said the current administration is aware that one of the setbacks entrepreneurs have suffered in Nigeria in recent years is the fluctuation of foreign exchange and its availability.
He therefore, assured that this administration is committed to ensuring that forex is readily available to entrepreneurs and that he has directed that the Central Bank of Nigeria (CBN) holds quarterly reconciliation meetings with a view to resolve this issue.
He further announced that the current administration is open to provide tax holidays to encourage existing and new entrants into the Nigerian Aviation Sector.
Keyamo reiterated that his administration would continue to sustain the support being given to the industry to build a transparent, stable and predictable investment climate, as well as include aviation in the continent’s national development plan.
Meanwhile, the International Air Transport Organisation (IATA) has decried that Nigeria burdens its airlines with heavy and sundry taxes and charges.
Vice president, IATA, Africa and Middle East, Kamil Al Alwadi, while speaking at the summit lamented that there are about 27 charges imposed on airlines by the Nigerian government.
According to him, research reveals that Nigeria ranks highest in airport charges in Africa, while the Nnamdi Azikiwe Airport, Abuja is the most expensive in Africa, closely followed by the Murtala Muhammed Airport, Lagos.
He further lamented the stunted growth in the African region, especially Nigeria, calling on Nigerian government to create a conducive environment for airlines to thrive.
He said: “In a recent research conducted we discovered that the most expensive airport in Africa is Abuja airport, followed by Lagos airport, with all these exorbitant charges, Nigerian airlines can’t compete with their foreign counterparts.
“Africa has put itself in a a place where it cannot help its own; expensive fuel, excessive charges, leasing and insurance through the roof, the airlines need to be financially viable too.
“The airlines contribute to the country’s Gross Domestic Product (GDP) but Nigeria needs to decide what to do for them to survive.”
According to him, carriers based in Africa are expected to generate a moderate combined loss of around $484 million in 2023 because the continent remains a difficult market in which to operate an airline, with economic, infrastructure and connectivity challenges impacting the industry’s performance.
“However, despite the challenges, the industry continues to move towards profitability following the COVID disruption and could be in the black as soon as next year.
“Underpinning this is the robust demand for air travel. As we saw in the second quarter of 2023 and for two consecutive quarters, African carriers had one of the world’s highest annual passenger traffic growth rates, second only to Asia Pacific.
“With total traffic up 38.9 per cent compared to the same quarter in 2022, African carriers growth outperformed the industry-wide average for total and international traffic, though the region has not fully recovered to pre-pandemic levels.
“Second quarter 2023 RPKs were 9.2 per cent below the same quarter in 2019. Despite this continued positive performance, the region still confronts economic challenges that severely limit the affordability of air travel, in addition to a range of infrastructure issues that curb capacity and hinder the development of consistent air service,” Al Alwadi stated.