•Say Abuja, Lagos most expensive airports to operate in
…We’ll provide forex, tax holidays for operators
–Aviation minister
From Chinelo Agina Obogo, Abuja
The International Air Transport Organisation (IATA) has accused the Nigerian government of stifling domestic airlines with multiple taxes and over 27 charges.
Speaking at the 7th Aviation Africa summit and exhibition on Wednesday in Abuja, IATA’s Vice President for Africa and the Middle East, Kamil Al Alwadi, said that the taxes imposed on domestic operators by the Nigerian government have made it difficult for them to compete globally.
He also said that research has shown that airport charges makes Abuja and Lagos airports the top two among the most expensive airports to operate in Africa.
“In a recent research conducted, we discovered that the most expensive airports in Africa to operate in are Abuja airport, followed by Lagos. The exorbitant charges imposed by the government means that Nigerian airlines can’t compete with their foreign counterparts.
“Africa has put itself in a place where it cannot help its own. Fuel is expensive, there are excessive charges, leasing and insurance cost has gone through the roof, the airlines need to be financially viable too. The airlines contribute to the country’s GDP but Nigeria needs to decide what to do for them to survive”, he said.
He said African airlines are expected to have a moderate combined loss of around $484 million by the end of 2023 because the continent remains a difficult market in which to operate an airline, with economic, infrastructure and connectivity challenges impacting the industry 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,” he said.
He also said that over the next 20 years, Africa’s passenger traffic will double, eclipsing 300 million passengers by 2040 at an annual average rate of 3.4 per cent.
“As you can see, the continent stands out as the region with the greatest potential and opportunity for aviation. But this potential is limited by safety incidents, infrastructure constraints, blocked funds, high costs, lack of connectivity, regulatory impediments, slow adoption of global standards and skills shortages, among other factors,” he added.
In his remarks, the minister of aviation and aerospace development, Festus Keyamo, said that it is the vision of this current administration to make Nigeria the aviation hub of Africa and that in order to attract foreign investors, the government is already looking at areas to improve the industry.
He said the government is looking to upgrade the CAT3 landing system at major airports, to construct the second runway in Abuja, and carry out airport improvement programmes through concession to turn major airports into aerotropolis.
He also said the government welcomes major players in aircraft leasing to invest in Nigerian airlines to provide state of the art aircraft and that the government will ensure enforcement of contract agreement, the rights of investors will be protected and the government will uphold its international obligations.
On forex availability, he 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. This administration is commit to ensuring that forex is readily available to entrepreneurs and I have directed that the Central Bank of Nigeria (CBN) holds quarterly reconciliation meetings with a view to resolve this issue. The current administration is open to provide tax holidays to encourage existing and new entrants into the Nigerian aviation sector.”