The Chairman and Chief Executive Officer of Air Peace Limited, Dr Allen Onyema, has expressed confidence that President Bola Ahmed Tinubu’s intervention in the ongoing controversy over the five per cent Ticket Sales Charge (TSC) will help save Nigeria’s struggling airline industry.
Onyema, who is also Vice President of the Airline Operators of Nigeria (AON), described President Tinubu as a “listening President,” saying the aviation sector would experience a major transformation if the President is given the opportunity to hear directly from airline operators about the factors responsible for the high cost of doing business in Nigeria.
He spoke as the keynote speaker at the 30th Annual Conference of the League of Airport and Aviation Correspondents (LAAC), held in Lagos on Thursday, with the theme, “Towards a Sustainable Aviation Industry: Balancing Government Revenue Demands with Sector Growth.”
Onyema said the designation of Nigeria by the International Air Transport Association (IATA) as one of the most difficult and expensive environments in which to operate an airline could be reversed if the President understood the burden imposed on local carriers by multiple taxes and charges.
According to him, the current system in which airlines remit five per cent of the value of every ticket sold to the Nigerian Civil Aviation Authority (NCAA) is financially constricting operators and contributing to the high mortality rate of airlines in the country.
He advocated replacing the percentage-based TSC with a fixed amount attached to each ticket, arguing that such a system would make the charge easier for airlines to plan for and pay while improving the long-term sustainability of the sector.
“What will put an end to the high mortality rate of Nigerian operators is when there is an amicable tax and charges system that protects the airlines, aviation agencies and the travelling public in a win-win situation,” he said.
Onyema recalled the Federal Government’s decision to exempt airlines from the four per cent Free on Board (FOB) levy introduced by the Nigeria Customs Service, saying the intervention demonstrated the positive impact of presidential action when the consequences of a policy are properly communicated.
He said the Customs Comptroller-General, Adewale Adeniyi, after being informed of the potential impact of the levy on airlines, took the matter to the Presidency, leading to its removal for airlines within 24 hours.
“I was there in the Presidential Villa with the Customs boss. This President acted swiftly and waived it for airlines within hours of being made to understand the would-be effects of such a charge on the viability of indigenous Nigerian airlines,” Onyema said.
He added that the experience showed that President Tinubu was willing to listen and act when presented with the facts.
“That is the power of listening. President Tinubu is a listening President,” he said.
According to Onyema, the President has not yet heard directly from airline operators about the factors responsible for Nigeria’s poor ranking by IATA.
“The problem is that the President has not heard from us on why his country was so described by IATA, who equally compared Nigeria to Afghanistan,” he said.
“When he does see us, aviation will flourish in this country. It will benefit the agencies, the government and the flying public.”
The Air Peace chairman further warned that Nigerian airlines could not achieve sustainable growth while operating under a multiplicity of taxes, levies and charges.
He maintained that converting the TSC from a percentage of ticket value to a specific fixed amount would ultimately benefit not only airlines but also the NCAA, other aviation agencies and passengers.
Onyema also cited the high number of airlines that have exited the Nigerian market as evidence of the need for urgent reforms in the sector.
He recalled that at various aviation fora, IATA had identified Nigeria as one of the most expensive countries in the world in which to operate an airline, citing high operating costs as a major threat to the viability and competitiveness of local carriers.
He said the situation had raised concerns over how Nigerian airlines continued to survive despite the difficult operating environment.
Onyema also recalled that following the removal of the four per cent FOB levy, he had pledged to create 1,000 jobs for Nigerians.
According to him, about 78,000 Nigerians applied for the positions, from which 1,000 young Nigerians were eventually employed in fulfilment of the promise.
He therefore urged the government to reconsider the existing aviation tax and charges framework, stressing that a sustainable model must balance government revenue generation with the survival and growth of indigenous airlines.
