Saw this great editorial in Vanguard vanguardngr/2013/10/frightening- revelations-planes-may-keep-dropping-skies/ What this means is that there appears to be a fundamental problem in the system that has not been addressed, and that has to do with policies enunciated for the industry by government. There is a suggestion that no matter the volume of safety audit conducted on airlines, safety would remain elusive as long as the operating environment created for airlines remained harsh. Neither would re-modelling of airports reverse this trend. The mortality rate of airlines in Nigeria isnhigh due to what observers describe as a very harsh operating environment . Bellview, ADC, Sosoliso, Spaceworld, EAS, Harka, Okada, Oriental, Concord, Flash, Air Nigeria are some of the airlines that have exited the airspace in the last 10 years. This is frightening. Some others may yet follow. Firstly, the tax regime introduced by government for airlines in the country creates a near asphyxiating ambience for operators. [/b]Airlines pay all sorts of charges which stifle them. Consequently, this is the reason most airlines find it difficult to meet their financial obligations to suppliers, service providers and staff. Even the payment of salaries and aircraft maintenance, when due, becomes a Herculean task. Airlines in Nigeria pay some of the most outrageous charges in the world. These come in form of ground rent, landing and take off, day and overnight parking charges as well as navigational fees; and these are exclusive of other multiple taxes imposed by government. Overnight parking charges range from between N25,000 and N30, 000 per aircraft. Airlines in Nigeria also pay government taxes as high as 18 per cent of sales, including Value Added Tax, VAT, Passenger Service Charge, PSC and NCAA’s TSC. [b]These taxes and charges, to say the least, are stringent for the airlines to operate safely and profitably. And an airline that cannot operate safely and profitably is an accident waiting to happen. Another reason air safety would remain a challenge in Nigeria, no matter the frequency of audit, is the cut-throat price of aviation fuel, otherwise known as JET-A1. At present, this product sells for between N170 and N200 litre, depending on which part of the country it is being sourced. And because up to 40-45 per cent operational cost of airlines revolves around aviation fuel, the product is a huge cost component of their operations in the country. Over time, fuel suppliers have insisted on dispensing their products on a cash and carry basis because of the inability of airlines to settle accumulated debts arising from previous purchases. This has largely been responsible for some of the delays and flight cancellations experienced by passengers at airports across the country. Currently, there is no sign to indicate that government is addressing the problem. Most foreign airlines do their re-fuelling in neighbouring countries because of the high cost of aviation fuel in Nigeria but the local airlines have nowhere to go. I agree with this premise. anyone who has booked a flight online in the past few years will see that FG & Aviation agency taxes make up more than 50% of the ticket price (sometimes, much more) and the high price of aviation fuel is well known (shameful for an oil producing nation). With marginal profitability, the airlines have to cut corners, sometimes compromising safety. This is not to say the airlines are not culpable. Safety MUST NEVER be compromised, doing so is just plain criminal. But one has to imagine that the FG needs to make the business climate much less hostile to the carriers. A sensible thing to do will be to provide significant tax breaks for carriers that can demonstrate a world- class level of safety. That way, the money that will be spent on stringent safety checks will not be seen as an unnecessary burden.
Posted on: Tue, 29 Oct 2013 14:14:28 +0000
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