The Centre for The Promotion of Private Enterprise (CPPE) has called on the federal government  to address  the structural challenges of multiple taxes and excessively high fees  and levies, by agencies in the nation’s aviation sector,  since they serve as major disincentives to operators in the  space.

 

 

The Centre made the call in its reaction to the federal government’s approval of  a 30 percent discount on outstanding debts  owed by Nigerian airlines,  signed by its Chief Executive Officer, Dr. Muda Yusuf.

 

It  noted that  charges imposed by key agencies, including the Nigerian Civil Aviation Authority [NCAA], the Federal Airports Authority of Nigeria [FAAN], and the Nigerian Airspace Management Agency (NAMA), collectively account for over 35 percent or airlines revenues.

 

Describing the development as clearly incompatible with the thin margins typical of the aviation business, the Centre called for urgent cost reforms, since the sector is too strategic to be weighed down by such cost pressures.

 

 

“ It is central to economic connectivity, trade facilitation, investment flows, business mobility and national integration. The sector has also become even more critical because road travel has become increasingly unsafe in many parts of the country, compelling many Nigerians to opt for air travel as a safer alternative.

 

“Yet, the sector continues to suffer from a persistently high airline mortality rate, largely reflecting the difficult and hostile operating environment,” it stated.

The  Centre, therefore, urged the Federal Government to undertake a comprehensive rationalisation of aviation charges, arguing that the present regime, spanning ticket sales charges, cargo sales charges, passenger service charges, landing and parking fees, aircraft inspection charges, administrative and facility fees, boarding bridge charges, fuel-related charges, and import duties on aircraft and spare parts, among others, is overly burdensome, fragmented and detrimental to the sustainability of domestic airline operations.

 

While stressing the need for a streamlined and moderated cost structure, the Centre argued that reducing both the multiplicity and magnitude of those charges would  significantly enhance the viability, competitiveness and resilience of domestic airlines.

 

Commending the federal government for  the debt discount, the  Centre, however, described it as offering  short-term respite, since it  never addressed  the deeper structural cost challenges, confronting the nation’s aviation sector.

“Government support for the aviation sector must therefore go beyond debt relief. What is needed is a comprehensive reform of the aviation cost environment to ensure that domestic airlines are not overburdened by charges that undermine investment, weaken service quality, raise ticket prices and threaten the long-term sustainability of the sector,” the Centre argued.

 

It called on the government to see it as an economic imperative and safety consideration,  since  excessive financial pressure on operators could have unintended consequences for operational standards.