Excessive charges impeding growth of Nigeria’s aviation sector — IATA

…As FG unveils aviation roadmap projects

…Tinubu directs CBN to address repatriation of $600m trapped funds

…FG woos investors with tax holidays, aircraft maintenance facility

The International Air Transport Association (IATA) has identified excessive charges by Nigerian airports as an impediment to the growth of the aviation sector in the country.

IATA’s, Vice president, Africa and Middle East, Kamil Al Alwadi, who spoke at the ongoing African Aviation Summit in Abuja identified about 27 charges imposed on airlines by the Nigerian government.

According to him, research indicates that Nigeria holds the top position in terms of airport charges among African countries.

He noted that Abuja airport is the most costly airport in Africa, closely followed by Lagos airport.

He lamented the stunted growth of aviation in the region, especially Nigeria, calling on the Nigerian government to create a conducive environment for airlines to thrive.

In his words, “In a recent research conducted web discovered that the most expensive airport in Africa is Abuja airport, followed by Lagos airport, with all these exorbitant charges, Nigerian airlines can’t compete with their foreign counterparts.

“Africa has put itself in a place where it cannot help its own, expensive fuel, excessive charges, leasing and insurance 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.

“Carriers based in Africa are expected to generate a moderate combined loss of around USD 484 million in 2023 because the continent remains a challenging 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.

“With total traffic up 38.9 per cent compared to the same quarter in 2022, African carriers growth outperformed the industry-wide average for total and international traffic, even though the region has not fully recovered to pre-pandemic levels. Q2 2023 RPKs were 9.2 percent below the same quarter in 2019.

“Despite this continued positive performance, the region still confronts economic challenges that severely limit the affordability of air travel, in addition to a range of infrastructure issues that curb capacity and hinder the development of consistent air service,” he explained.

The IATA also recently queried the federal government for not being responsive to the foreign airlines’ inability to repatriate their funds in excess of $600 million.

Responding, the Minister of Aviation and Aerospace Development, Festus Keyamo disclosed that the current administration is open to providing tax holidays to encourage existing and new entrants into the Nigerian Aviation Sector.

According to the Minister, “The recent global events, further exposed the immense contribution and importance of air transportation as a catalyst for economic development, vital engine of global socio-economic growth, one of the greatest contributors to the advancement of modern society and a key instrument for achieving the United Nations Sustainable Development Goals (SDGs).

“These underscore why the world was greatly impacted when international aviation was disrupted by the pandemic and other global occurrences. It is the Vision of this current administration to make Nigeria the Aviation hub of Africa.”

Keyamo added that the government will ensure the enforcement of contract agreements and the rights of investors and indeed all parties are protected and Nigeria being a signatory to the Cape Town Convention will uphold international obligations.

He also reinforced the commitment of the administration to making forex readily available to entrepreneurs revealing that President Tinubu had directed that the CBN holds quarterly reconciliation meetings with a view to resolve this issue.

He noted that the development was one of the reasons President Tinubu travelled to the United Arab Emirates, UAE, to address.

The Minister also unveiled three roadmap projects which include Aerotropolis, Aircraft Leasing Company, ALC, and Maintenance Repair and Overhaul, MRO, facility.

He unveiled five focus areas to realise the country’s vision of becoming an Aviation Hub in Nigeria.

The key areas listed include infrastructure upgrade, ALC, MRO facility and forex availability.

“MRO facility is another critical aspect that can make the Nigerian aviation industry a hub on the continent. With the shortage of qualified engineers, the current administration is willing to provide all the necessary support for the establishment of world-class MROs and training organisations.

“On upgrading infrastructure, this includes upgrading of the Cat3 landing system, at major airports, construction of the second runway in Abuja, airport improvement programmes through Concession and government willingness to partner with companies to turn major airports into Aerotropolis,” he said.