NIGERIA: Airline Operators Cry Over Unfair High Taxes And Expensive Jet Fuel, JET A1

Nigerian airlines are in serious dire straits, raising grave concern over their continued existence. Many of them are already finding it difficult to operate due to high Customs duty, astronomical cost of aviation fuel, otherwise known as JET A1, high interest rate, low passenger traffic, alleged multiple taxation and unfavourable government policies.

Operators said that these challenges were detrimental to the sustenance of their business. Already two carriers (names withheld) have ceased operations, with few others wobbling and providing less than satisfactory services The Managing Director of Arik Air, Chris Ndulue, said that for domestic airlines to grow, the Federal Government must have to support the operators by streamlining taxes, reviewing them downwards and even banish Value Added Tax (VAT), which is not paid by other sectors in the transport industry.

He said that there must be consistent, planned and committed policy by government to grow and encourage domestic airlines to operate profitably. Ndulue added that such help would provide incentives to safety and manpower development by the airlines. He said: “What we expect from government is to provide good environment for doing business. One of the major problems in this environment is borrowing.

The borrowing cost is very high; this can be reduced by 75 to 50 per cent. Multiple taxation is one of the major problems in the industry. “The aviation industry requires special support. It is an industry that government should be supporting, but it has not been getting this support.”

Also, the Chairman of Airline Operators of Nigeria (AON), Captain Nogie Meggison, said that one of the major challenges being faced by Nigerian airlines was the high cost of aviation fuel, known as Jet A1, which, he noted, was not always available. He explained that aviation fuel used to be piped from Atlas Cove to the airport, but had been stopped many years ago.

Since then government has not deemed it necessary to rehabilitate the pipeline, which would have made it easier to obtain fuel at the airport without trucking it as it has attendant fire risks,” he added. Meggison said that these and other factors had made airline business not too profitable for investors.

Also, it was learnt that the failure of many of Nigeria’s domestic carriers, their short life span and uncertainty of the future have been attributed to wrong use of equipment, poor capitalisation, high cost of fuel and access to credit facility at high interest rates.

Till date, no Nigerian airline on scheduled commercial operation has thrived for up to 20 years, except the defunct national carrier, Nigeria Airways Limited (NAL), which was finally liquidated by the Federal Government in 2004. While the country’s air transport market is viable and highly profitable to foreign airlines, Nigerian operators have been narrating tales of woe, losses and insolvency.

IVORY OAST: Air Cote d’Ivoire Consolidates Operation To Nigeria

Air Cote d’Ivoire, which started operation to Lagos in January has said it is consolidating on the route, which has become the most promising and recently in Lagos decided to fete its business partners in Nigeria, including travel agents in appreciation of their support and also pledged to continue to provide the best service to the Nigerian passengers.

The airline said its objective was to service Africa but now it was concentrating its operations in West and Central Africa with Abidjan and Lagos as major destinations.

Country Manager for Air Cote d’Ivoire, Moustapha Fofana, said there is a niche market between Nigeria and Cote d-Ivoire as there is increased business in the two countries which makes it necessary to have direct, regular flight between Lagos and Abidjan.

He said such growing market was created by private business owners, diplomats and corporate establishment representatives who need to shuttle between the major cities of Lagos and Abidjan, so there was need for an airline to step in to fill the gap of a direct flight emanating from Abidjan to Lagos.

“This country (Nigeria) offers a huge business market with a growing movement of individual businesses and telecoms, banks, manufacturers, oil and gas multinationals from Nigeria to Cote d’Ivoire,” said Fofana.

Fofana said since the commencement of operations early 2015 patronage has kept going higher and higher.

“The Nigerian market is the best thing that has happened to us. We are flying into Lagos and the patronage has been so encouraging and we hope as the market improves one day in the future we may fly into Abuja,” he said.

According to him, the airline was established as a flag carrier of the government of Cote d’Ivoire in 2012 with institutional investors, including Air France, which also the airline’s technical partner.

According to Fofana, the oldest aircraft in the fleet of the airline was five years and the target was to develop an airline that would be the first choice of travellers between the West African and Central African sub-regions.

“We want to connect Central and West Africa by easing air traffic movements,” said Fofana. “We don’t seek to enter Europe, America or Asia, at least not for now.”

He said in the last three years, the airline has been able to launch direct flights from Abidjan into 19 capital cities in Central and West Africa.

“The business of the airline is to connect West Africa and Central African and subsequently Africa,” he said.

Fofana also noted that the Nigerian market is very important for Air Cote D’Ivoire in the light of its performance since operations began into Lagos.

“The company commenced operations three years ago and we believe this is the right time to be in the Nigerian market. Our connections allow corporate organisations and business travellers to connect major cities in West and Central Africa in the shortest possible time with four weekly flights out of Lagos to Abidjan on Tuesday, Wednesday, Friday and Sunday and three times weekly to Kinshasa on Monday, Thursday and Saturday using an A319 except on Wednesdays,” he said

According to Fofana, the airline prides itself on offering customers personalised services, comfortable and spacious Business Class seats, power outlets in every Business Class seat and two for every three Economy Class seat; Individual Headphones in all classes as well as several other value added benefits through its Frequent Flyer Programme known as “SMILE.” In the area of safety, Fofana stressed that Air France is the airline’s technical partner both as an investor and in the area of aircraft maintenance.

“We have regular safety checks on all our aircraft three times a year; notably every Friday, half yearly in Casablanca and yearly in Toulouse, France.”

Air Côte d’Ivoire commenced flight operations into Lagos on January 3, 2015 with its Airbus A319-TUSTSA with capacity for 12 business and 96 economy passengers while the inaugural flight departed Lagos the following day.

The airline based in Abidjan succeeded the former country’s flag carrier, Air Ivoire.

From its hub in Abidjan it operates to over 14 destinations in West and Central Africa including Accra, Bamako, Brazzaville, Conakry, Cotonou, Dakar, Doula, Freetown, Kinshasa, Lagos, Libreville, Lome, Monrovia, N’Djamena, Niamey, Ougadougou, Pointe Noire and Younde.