The Nigeria aviation industry is facing imminent collapse and requires urgent intervention , the House of Representatives has raised the alarm
The regulatory agencies are also facing challenges of which there is the dire need to inject no less than N50 billion and not the N4bn COVID-19 bailout which is yet to be released to the airlines will bring succor to the sector
Chairman of the House of Representatives on Aviation, Nnolim Nnaji who raised the red flag said findings from the just concluded public hearing on the amendment Bills for the review of some aspects of the civil aviation Acts uncovered the sorry state and impending collapse of the sector.
He explained when he addressed the media on the worrisome state of the Aviation Sector of the country ,that while the local airlines could barely operate at near optimal level, Government regulatory agencies are also in near comatose and cannot provide the needed regulations, facilities to ensure full potentials of services required
“The industry is in dire need of urgent intervention to save it from imminent collapse”, he noted , adding that as a great catalyst of economic development of the country, only in 2019, the aviation industry contributed N198.62 bn according to the National Bureau of Statistics NBS to the nation’s gross domestic product (GDP) of the country and an increase to the GDP was expected in 2020 if not for the Coronavirus pandemic which dealt a devastating blow on the industry.
He noted that though it not an exerggeration to say that aviation is the bedrock of the national economy, it is important to note that that the all important sector is facing extinction, the consequence of which will be very detrimental to the overall economy of the country if not squarely addressed immediately.
For instance, the committee expressed worry over the list of challenges bedeviling the airlines, some of which the government intervened but without implementation.
“The operators listed the challenges which they claimed have been crippling their operations as follows; Non implementation of the Executive Order on Zero Customs Duty and Zero VAT on Importation of Commercial Aircraft and Aircraft Spare Parts.
Others are , ‘Non implementation of the Executive Order on the Removal of VAT from Air Transportation,. Inability to Access Forex, High cost of capital and lack of single digit lending interest rate for airlines.’
The challenges among some include: “Replacement of NCAA’s 5% Ticket Sales Charge (TSC) with a Fixed charge similar to FAAN Passenger Service Charge (PSC) : Multiplicity of Taxes, Fees and Charges and the urgent review of NAICOM Act on Aviation Insurance and exceptional Permission to grant
“The externalization of insurance placements for domestic airlines in the country on an exceptional basis in the interest ofair transport safety due to inability of Nigerian Insurance Companies to cover aviation risks”
Multiple Entries and Multiple Frequencies Granted to Foreign Airlines and depletion of the domestic airline market with loss of jobs as well as unnecessary delays for weeks in clearing of ADC spares parts for aircraft. High Operating Cost (continually rising cost Aviation fuel) and Ease of doing business, in addition to Over Regulation of Domestic Airlines.
The almost endless list includes, inadequate night landing facilities in most of the airports which is affecting the operating flight hours daily.”.
The Committe assured nonetheless, that as parliament, they will look into the various demands, especially those that the Federal Government has intervened ,like the Nigeria Custom Service refusal to respect the President’s Executive Order on duty exemption and other palliatives meant to lighten the burdens of the airlines, multiple entries for foreign airlines, etc
They are argued that if developed countries could give bailouts in billions of dollars to airlines to cushion the impact of coronavirus with all incentives at their disposal , apparently our locals are jeopardized because they are left in the limbo.
The committee assured that while it pursues vigorously the revamping of local airlines, the regulatory agencies in the sector will be carried along by improving their funding and allowing them to also remit 25 percent of IGR and keep the rest for infrastructural development of the sector in line with international best practices
The chairman, however, told the press that the committee intends to interact with the leadership of the National Assembly and the Ministry of Aviation on all the concerns raised by the operators and other sundry issues confronting the industry so as to avert the collapse of the industry
According to him, It is important that the Federal Government urgently comes to the aid of the operators by addressing their needs in the overall interest of the national economy to relieve the airlines operators frustration as well as threat of shutting down their operations due to lack of funds and harsh operating environment
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