Airlines’ taxes up by 40%

*Operators lament

Airline operators have raised concern that their operations are been stifled by manipulation, feasting and pushing of their finances through multiple taxes, charges and levies to the extent that they have come under pressure and could go bankrupt.

These taxes, they alleged, are up by between 35 and 40 per cent. The operators under the aegis of Airline Operators of Nigeria (AON) also disclosed that Nigerian airlines pay over N10 billion on taxes yearly, according to recent estimates, lamenting that the huge taxes undermine profitability and threaten their ability to maintain their aircraft overseas.

Specifically, these taxes are paid by commercial airlines in schedule services, charter airlines and companies that provide services to oil and gas companies, including Bristow, Caverton, Aero and others.

They stated that charges, taxes and levies are high as much as 35 and 40 per cent, a situation they said has equally pushed up the price of air ticket by over 25 per cent at a time passengers’ purchasing power has dwindled with carriers grappling with the effects of recession.

Chairman, AON, Capt. Nogie Meggison, said domestic airlines, on the average, pay between 35 per cent and 40 per cent of the cost of a ticket as taxes and charges that come under the guise of statutory levies.

He said: “These include five per cent ticket sales charge, five per cent cargo sales charge, five per cent Value Added Tax, passenger service charge, charter sales charge, aircraft inspection fees, simulator inspection fees, landing charges, parking charges, terminal navigational charge, enroute charge, fuel surcharge, airport space rent, electricity charges, apron pass, ramp access charges, ODC and a newly imposed registration fee, all of which are paid to government agencies.”

He added that many of the taxes and charges amounted to double taxation such that any incentive seemingly provided by government to airlines was being taken back by the agencies.

Meggison said: “The Nigerian Airspace Management Agency charges domestic airlines different kinds of navigational charges, which they should ordinarily be exempted from in line with global best practices, except in Nigeria.

“The implemented charges range from terminal navigational charges to en-route navigation charges, over-flight charges, clearance charges, and extension charges.

Even foreign airlines don’t pay enroute charges or extension charges, which the local airlines are forced to pay. “In spite of all these charges, NAMA still gets 23 per cent from the NCAA’s five per cent Ticket Sales Charge account.

Even with all these charges, many of the airports in the country do not have runway lights and navigational landing aids.”

Immediate past Director- General of the International Air Transport Association (IATA), Tony Tyler, while he held sway, said the global body was working closely with the Nigerian government to resolve the high charge regimes for air navigation services.

He said Nigeria is among the countries with high aviation taxes in the world. Many international and domestic airlines attribute the high cost of air tickets to the multiple taxes and charges.

Tyler argued that besides the limited physical infrastructure, there are other deficiencies, which must be addressed as they concern airport charges.