The International Air Transportation Association (IATA) has mentioned that the Lagos and Abuja airports in Nigeria are ranked as the most expensive airports to operate in terms of levy and tax charges in the world.
The association in its presentation at the ongoing three-day Aviation Summit in Abuja, mentioned the Abuja Airport as the most expensive, followed by the Lagos airport.
Criticizing Nigerian Aviation Levies
Mr. Kamil Al Alwadi, the Vice president, of IATA, Africa and Middle East, in his presentation, said that Nigerian airports charge foreign airlines about 27 levies, which makes it the most expensive in the world discouraging airlines from flying into the country.
Alwadi berated the Nigerian government for stiffing airline operations with heavy and sundry levies and taxes.
He lamented the stunted growth in the region, especially Nigeria, calling on the Nigerian government to create a conducive environment for airlines to operate and thrive.
“In recent research conducted it was 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 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”, he said.
Challenges and Outlook for African Airlines
According to him, carriers based in Africa are expected to generate a moderate combined loss of around $484 million in 2023 because the continent remains a difficult market in which to operate an airline, with economic, infrastructure, and connectivity challenges impacting the industry’s 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.
Looking further ahead, over the next 20 years, he said 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.
Also, the Federal Government has directed the Central Bank of Nigeria (CBN) to hold a quarterly reconciliation meeting with it on foreign exchange scarcity, which is crippling the operations of most indigenous airlines.
The government said that the quarterly meeting would enable it to get updates on the forex challenge in the country and would also lead to resolving all lingering issues.
Government Initiatives for Aviation Industry
Mr. Festus Keyamo, the Minister of Aviation and Aerospace Development disclosed this yesterday in Abuja during his welcome address at the 7th annual conference of Aviation Summit held in Abuja.
Keyamo also apologized to the affected foreign airlines for their trapped funds in the country, promising that the government would resolve the issue soonest.
“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 committed to ensuring that forex is readily available to entrepreneurs and the government has directed that the Central Bank of Nigeria (CBN) holds quarterly reconciliation meetings to resolve this issue.”
Keyamo has also unveiled three roadmaps for the Nigerian aviation industry.
Keyamo mentioned the roadmaps to include metropolis, Maintenance, Repair, and Overhaul (MRO) facilities, and an Aircraft Leasing Company (ALC).
He said these were parts of the priorities of the current administration.
He also emphasized that the three are critical for the development of the aviation industry in Nigeria and West Africa.
Download Nairametrics App for breaking news and market intelligence.