The Airline Operators of Nigeria (AON) has cited the 24-hour intervention of the Comptroller-General of Customs, Adewale Adeniyi, in the removal of the four per cent Free On Board (FOB) customs duty as an example of how responsive government action can ease the burden on airlines grappling with about 54 different aviation-related charges.
Vice Chairman of the AON and Chief Executive Officer of Air Peace, Allen Onyema, made the disclosure at the 30th Annual Conference of the League of Airport and Aviation Correspondents (LAAC) in Lagos, themed: “Towards a Sustainable Aviation Industry: Balancing Government Revenue Demands with Sector Growth”.
Onyema said the multiplicity of charges imposed on airlines had become a major impediment to the profitability and competitiveness of Nigerian carriers, both locally and internationally.
“One thing I want to mention is that there are many charges. If I were to list them, there are about 54 that airlines pay. Even for international flights, it’s the same”, he said.
He, however, highlighted the Customs intervention on the four per cent FOB duty as evidence that government agencies could make a significant difference to the fortunes of airlines when they listened to operators and acted swiftly.
Onyema recalled that after raising concerns over the duty, he encountered the Comptroller-General of Customs at the Presidential Villa and explained how the policy would affect airlines.
“I happened to be at the Villa that day, not to see him, and I ran into the Comptroller-General of Customs, a fantastic man. These are people who think about the country, not just revenue.
“He said to me, ‘It’s going to hurt airlines’. I said, ‘We are already bleeding. This 4% will hurt us’. He said, ‘Okay, let’s go see the President”, he recounted.
According to Onyema, the matter was resolved within 24 hours after the Customs boss helped facilitate the engagement with President Bola Tinubu.
“This man helped me. Within 24 hours, the 4% was removed. That is the power of listening”, he said.
The AON vice chairman said such responsiveness was what the airline industry needed from government, particularly at a time when operators were contending with numerous charges and other operational costs.
He also recalled an ECOWAS agreement, signed by President Tinubu, providing for a 25 per cent reduction in taxes across West Africa, lamenting that the provision had yet to be implemented.
Onyema expressed confidence that direct engagement between airline operators and the President could trigger significant reforms in the sector.
“I’m certain any day President Bola Tinubu sees us, if they allow us to see him, because I know he wants to meet with us, that will be the day there will be a revolution in the airline industry in this country. Because that man supports indigenous businesses”, he said.
He said the President’s busy schedule had so far made such engagement difficult.
“The problem is that the President has not seen us. He has too many things to grapple with. When he does see us, aviation will flourish in this country. It will benefit the agencies, the government, and the flying public”, Onyema said.
Bird Strikes Add to Airlines’ Losses
Also speaking at the conference, AON spokesperson and Chairman of United Nigeria Airlines, Prof. Obiora Okonkwo, highlighted another major financial burden confronting carriers – bird strikes.
Okonkwo expressed frustration over what he described as inadequate mitigation of bird-strike risks at airports, saying the incidents were keeping aircraft on ground and imposing heavy costs on airlines that had invested borrowed funds in their fleets.
“Today, I have an aircraft, E-190. This is the 13th day of AOG (aircraft on ground) due to bird strike. We bought new blades and fixed them”, he said.
He added: “Imagine having borrowed 30% of funds from the bank to acquire these beautiful aircraft, only to wake up and face a bird strike. It happens continuously within one month. It is very painful”.
Unruly Passengers Worry Operators
Okonkwo also raised concerns over unruly passenger behaviour during flight disruptions, recounting an incident involving a United Nigeria flight that returned to Lagos after heavy rain affected operations at Kano.
He said the passengers refused to disembark after the aircraft returned to Lagos and spent the night on the ramp because they wanted the aircraft to return to Kano.
“If we cannot protect airline workers, who are somebody’s wives, children, sisters, and brothers, then when there is any flight disruption, what happens? Staff disappear because nobody wants to be harmed”, he said.
More AOCs, More Pressure on Airport Infrastructure
The United Nigeria chairman further questioned the pace at which Airline Operating Certificates (AOCs) were being issued, warning that airport infrastructure was not expanding sufficiently to accommodate the growing number of operators.
Okonkwo said it took him between two and three years to obtain his AOC, whereas some new operators were now receiving theirs within about six months.
While supporting competition, he questioned whether existing airport infrastructure could accommodate the additional aircraft expected to enter the market.
“More AOCs are being issued, and perhaps five more will be issued by year’s end. More competition is fine, no problem. But where is the infrastructure to accommodate these additional aircraft”? he asked.
He cited a recent incident in which a United Nigeria aircraft remained on the tarmac for about 30 minutes because passengers could not disembark due to ramp congestion.
“If these new operators acquire aircraft quickly, the ground infrastructure is already full. I wonder if we have enough airspace”, he said.
Government Communication Also Under Scrutiny
Okonkwo also criticised statements by some government officials which he said could damage the reputation of the aviation industry and undermine investor confidence.
He urged government appointees, particularly those responsible for communicating government policies, to undergo training on aviation sector dynamics before making public statements on industry matters.
“I appeal to those appointed to speak for government, especially those with political appointments and limited industry knowledge, to undergo training that will equip them to conduct themselves properly. This sensitivity is crucial”, he said.