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.
We need Nigerian flag carrier Airlines, whatever name you want to call it. We cannot continue to help other countries airlines make more money, improve their countries Economy at the expense of our own country. We have suffered enough. Going to London for example, you have to parabolate round African continent before you get to London, this is no longer acceptable.
There are 2 or 3 direct flights to London everyday!
Nigerians should be more bothered about why there are no (or very few) direct flights between Nigeria and the rest of Africa, rather than making it easier to go spend (or deposit) money in the old colonial master UK.
It’s not only in the Aviation sector. Even our daily motor park and markets. Keke and Okada riders pay through their noses to AMAC levy, Union levy, FCT levy, Stickers, yearly emblems etc etc.
What is the use of the motor insurance levies Nigerians pay when registering their cars? Does the insurance companies even exist? Go to some border or the airports. You have 1001 age cies tasking for one thing or the order. Nigerian Govt and its agencies have never for one day thought about how to better the lives of its citizens except revenue generation…even the ir we breath is paid for in nigeria.
Tufiakwa
I honestly do not think our government should invest in floating any airlines for now; if for anything they should further decentralise the industry and loosen up on the corrosive bureaucracies in setting up an airline, the monies available to government could be used in improving airports infrastructures across the country and FAAN should be privatised ;they lack the wherewithal to transform our airports to world class centres. The agencies within our airports are way too many and encourage too much extortions from passengers while adding little or no value at all.
This is a shameful position to occupy