Aviation Earned $1.13bn In 2014/2015, Says Report

The estimated total earnings in foreign exchange that accrued to the aviation industry were $1.132 billion according to statistics of passenger traffic for 2014/2015.

The figure shows that within that period 2.5 million litres/ day of fuel was sold to foreign airlines at $0.60 per litre, which amounted to $400, million.

The Federal Airports Authority of Nigeria (FAAN) Passenger Service Charge (PSC) of $50 per passenger on about 3.5 million outbound International Passengers (2014/2015 FAAN Passengers Traffic Statistics) translated to $150 million; landing and parking charges on 25,000 foreign airlines aircraft at average of $1500 per aircraft amounted to $62 million according to 2014/2015 FAAN air traffic statistics made available to Woleshadare.net.

For the Nigerian Airspace Management Agency (NAMA), air traffic control/air navigation service charge on about 100,000 inbound, outbound or overflying International Flights at average of $600 per flight, $60 million was realised.

Also accruing to the coffers of government was the $20 airport security tax, which passengers leaving the country pay. Security charges of $20 per passenger on 2.5 million outbound international passenger grossed $50 million.

The NCAA/ministry charges on Bilateral Air Services Agreement (BASA) royalties and commercial agreement with foreign airlines on about 2.5 million inbound and outbound passengers at average of $80 per seat amounted to $280 million.

Foreign exchange earnings on inbound passenger and cargo from about four airlines operators on regional, continental and intercontinental at average of $2.5 million per week amounted to $130 million.

The foreign earnings of other aviation service providers such as Nigerian Aviation Handling Company (NAHCO Plc, Skyway Aviation Handling Company Limited (SAHCOL) are not included.

Speaking on the issue, former Commandant, Murtala Muhammed Airport, Lagos, Group Capt. John Ojikutu, said from the estimated forex earnings, it would appear that the service providers make more forex earnings than the airline operators especially the fuel marketers, NCAA and FAAN. He noted that one must however, be mindful that these earnings are the benefits of the various BASA between the Federal Government and countries of the foreign airlines.

“Therefore BASA must be seen as the commonwealth of Nigerians that should be shared to the operators according to their operational needs.”

He noted that if the fuel marketers who presently are importing fuel do not supply fuel, the airlines would not fly, adding that they should therefore be given the first consideration over the other operators.

Secondly, forex earnings so earned, he said, must be domiciled in an Aviation Operational Sustenance Account with CBN to support airline operations, hinting that they should in turn be given the naira equivalent.

Ojikutu stated that it could however, be used for the specifics listed in the Operators Business Plan approved annually by NCAA in accordance with Part 18.7.5 or 18.10.5 etc to support operations.

“When the needs arise, it could be used for any airline‘s capital project provided it is at least in its three years consecutive Business Plan approved by the NCAA and the National Assembly in consultation with other operators.”

He called on government to audit airlines and other operators’ foreign exchange earnings and spending in the last five years to determine their genuine annual forex needs.

His words: “Government should review the NCAR Economic Regulation to enforce all first line operators to domicile their foreign exchange earnings and spending in an account with the Central Bank of Nigeria (CBN). CBN can open a window for operators who want to collect naira equivalent but can only collect from forex sustenance account with the approval of the NCAA and subject to the operations requirements in the business plans submitted for that year.”

This arrangement, he reiterated, would reduce the demand for forex by airlines from CBN, stressing that CBN would have sufficient forex to offer foreign airlines to repatriate their earnings to their home countries.

Annual excess in forex earnings he also said, would also grow for capital projects for front-line operators as loans.

“Again, based on their business plan submitted, evaluated and approved by NCAA, government may provide recoverable intervention funds for frontline operators,” he added.

Wole Shadare