Nigerian Airlines Must Stop Funding Aviation Parastatals to Ensure Survival, Profitability

Chinedu Eze

The Managing Director of Nigeria’s oldest carrier, Aero Contractors, Capt. Ado Sanusi has said that domestic airlines should stop funding aviation parastatals to enable them have funds to boost their operation and ensure their survival and profitability.

Sanusi said multiple taxations erode their revenue and capitalisation and make it extremely very difficult for the airlines to make profit.

He listed some of the charges to include: Passenger service charge, terminal charge, landing and parking, overflying charge, 5 per cent ticket sales and cargo sales charge and navigational charge, in addition to other taxes.

He said it is why Nigerian airlines have average of 10 years life span, noting that while there are many registered commercial airlines, only very few are currently operating and many of the existing ones lack capacity.

He suggested that the federal government should find other ways to fund the agencies in addition to the revenue they could generate from general aviation and international operations.

He insisted that as long as the airlines pay these multiple charges, they would not grow to become mega carriers.

Sanusi emphasised that because of the critical role airlines play as catalysts to any nation’s economy, government must provide airlines support for them to be sustainable and continue to provide critical services to the country.

“Why is it that Nigerian airlines don’t last long? We have studied the problems. We know the problems, but we have not tackled them. We have changed the names of the airline several times, but we have not removed the problems and the challenges that are facing the airlines.

“Without those challenges solved, if you register a new airline today it is still going to face the same challenges that have been there for years. If we want to have successful airlines in Nigeria, we must solve those problems.

“We must face the multiple taxation. We must face the fiscal challenges encountered by airlines that have been funding these parastatals. We must look at the basics. We must look at what we have been doing for years and have not been getting positive results.

“ There is no way we can have any change if we do not tackle the problem from the beginning. There is no way the airlines will fund the parastatals and they make profit.

“So the airlines are struggling. The parastatals are struggling. And we intend to have a viable aviation industry. It’s not possible. So there must be an intervention by government somewhere. There must be a change, a paradigm shift, from what we have been doing, from thinking that the airlines should fund the parastatals, the taxations that the airlines are having.

“We must also move from the same notion that airlines are high-profit organisations,” he said.

The Aero Contractors boss said 90 per cent of airlines that are doing well in the world today are either state-owned or they have major state interest. This is because airline business is capital intensive so, government’s support of airlines would enhance capitalisation and protection.

“But in this country the moment you start, the first day you start flying that is the first day you start paying the multiple taxes that you are supposed to pay. In fact, before you start flying you will be paying taxes, you will be paying for inspection you will be paying for licences of aircraft,” he lamented.

He called for encouragement for companies that have good corporate governance and a proper board.