Osinbajo to Address Challenges in Aviation Sector

By Chinedu Eze

The Acting President, Prof. Yemi Osinbajo, has said the federal government will urgently address challenges facing the aviation industry in Nigeria which have hitherto hampered the growth and development of the sector.

Some of these challenges include inadequate supply and high prices of aviation fuel, difficulty in accessing forex, non-establishment of maintenance, repair and overhaul facility in the country, poor airport infrastructure and high taxation.

Osinbajo said Nigeria has failed to take advantage of its natural geographical position as the hub for Africa but promised that government would begin to tackle these problems.

The acting president gave the assurance during a meeting with a delegation of Airline Chief Executives of the Airline Operators of Nigeria (AON) in his office in Abuja at the weekend.

Osinbajo said he used the meeting as a fact finding exercise to hear firsthand from the airline operators what domestic airlines are going through within the sector.

He said he wanted to know why in spite of the huge potential as a country blessed with a natural, God-given geographic location at the centre of Africa (4.30hrs to most parts of Africa); with most of its airport at approximately sea level and being the 6th largest producer of crude oil in the world with a population of 190 million and the attendant skilled manpower, yet Nigeria is not a hub for aviation activities on the African continent.

After listening to the AON representatives, the acting president acknowledged the difficult situation the airlines face and promised to take a closer look into the various issues raised in order to find ways of addressing them, making it more friendly and promoting the ease of doing business in the airline industry as well as position Nigeria to take advantage of the geographical location as the hub in Africa

During the interaction with the acting president, the Chairman of AON, Nogie Meggison, said some of the major issues facing airlines currently include the imposition of Value Added Tax (VAT) ( as domestic airlines are the only mode of transport paying VAT – Marine, Road, Rail and even the International airlines don’t pay VAT); harmonisation of over 35 multiple charges; reviewing five percent Ticket Sales Charge (TSC) to a flat rate (in line with the world practices); poor navigational and landing aids, high cost and epileptic supply of aviation fuel, obsolete infrastructure, limiting operations to daylight operation for most airports (Nigerian airlines  fly an average of only five hours as against the average of 10 hours worldwide per airplane); and lack of consultations with airlines before introduction of new charges and policies among others.

 “There is an urgent need for a deliberate economic policy that will support the positive growth of aviation and survival of domestic airlines in the country. For instance, following the air crashes of 2005/06, government came up with a policy to ensure air safety. Similarly, the economic policy for the sustenance of the industry needs to be seriously looked into.

 “Safety and economic policy go hand-in-hand. Where there is no financial profit for airlines safety would be compromised. A clear economic policy for the survival of domestic airlines is very critical at this time which has resulted over the years in the death of over 25 airlines in 30 years. Safety and financial economic policy must go hand-in-hand; as airline investors are in the business of aviation for the profit and can’t make profit without safety or have a safe airline without profit,” Meggison said.

He explained that this was one of the main reasons why airlines in Nigeria have short lifespan  for the short life span,  averaging about eight years.

 Meggison stressed that Nigeria has the same four major catalysts that transformed Dubai from a desert into a hub in the Middle East today..

“Aviation is an economic driver; therefore, we believe aviation should be supported as much as possible to thrive in order to reap its many benefits that can easily make aviation a major contributor to the GDP and to create 200,000 new jobs for our ailing youths through its direct and indirect link. Hence, rather than inflict greater burden on aviation, things should be made easier,” the AON Chairman said.