Govt. mulls new $50 baggage infrastructure tax, Minister to reject proposal

• Foreign airlines kick, new charge disincentive to investment
• Lagos, Abuja already world’s most expensive airports

A proposal to introduce a $50 baggage infrastructure tax for passengers travelling out of the country through the nation’s international airports has been floated by an unnamed government agency.

Aviation Metric learnt that an unnamed service provider had sent a proposal to the Ministry of Aviation and Aerospace Development and did a presentation to the foreign airlines on the desirability of introducing a fresh $50  baggage infrastructure charge which some of the foreign airlines believe would add to price of air ticket and further cement Nigeria’s place as the most expensive country in the world in terms of high charges.

The carriers have expressed their reservation about the new charge, explaining that the imposition of a baggage infrastructure levy would lead to astronomical air fares out of Nigeria and add a burden to travellers.

Meanwhile, the Minister of Aviation and Aerospace Development, Festus Keyamo, who spoke briefly with our correspondent on the matter by phone, calmed frayed nerves.

He said the government will not impose additional charges on the travelling public, adding that doing so would make life difficult for passengers, an indication that the proposal may not sail through.

He simply said, “Go about your normal business. That will be taken care of, and we will not do what will affect this sector negatively”.

The Minister has been at the forefront of pursuing the best interests of airlines and passengers with some of his reforms that are at the verge of lowering costs of domestic airline operations and the acquisition of aircraft by local operators at a favourable rate with delisting of the country from lessors blacklist.

Already, Nigeria charges international passengers $100 known as Airport Service Charge (ASC), five per cent Ticket Sales Charge (TSC) which is five per cent of the value of tickets sold, $20 security charge, bringing the total cost of what passengers pay on taxes on international flight to more than $250 per passengers.

These numerous charges have equally made tickets purchased in Nigeria the most expensive in the world, and a situation that has led many people to purchase their tickets outside of Nigeria, particularly from neighbouring countries.

The International Air Transport Association (IATA), the clearing house for over 300 global airlines, recently reaffirmed the Lagos and Abuja airports as topping the list of airports with the highest airport charges. The association described high taxes as inimical to the growth of the sector.

Vice-president of IATA for Africa and the Middle East, Kamil Al-Awadhi, said, “Abuja has the highest charges, followed by Lagos. How can you have such high taxes and expect to be profitable? Nigerian airlines can’t compete with others. African airlines have put themselves in a terrible situation to compete. They are not financially viable with excess charges

A foreign airline official who spoke to our correspondent under strict conditions of anonymity because of the sensitivity of the matter said,  “A service provider was sent to approach the airlines if they are willing to charge their passengers an additional fee of $50.”

“That is what is in the letter. They did a presentation to the airline. The airlines looked at it. The issue with the airline is not that they don’t want the system because it would improve their baggage facilitation.

“The issue is that Lagos and Abuja are already the most expensive airports in Africa. The imposition of $50 tax will increase the price of tickets and make it more expensive. That is why people are going outside Nigeria to go and buy tickets because it is too expensive for us here. It does not serve the purpose of the industry”.

Another top official of a United States-based airline that operates to Nigeria from the US said adding a tax of $50 will help to bring the number of passengers down; a situation he said would be counter-productive to the aviation industry in Nigeria.

“We are the first or second biggest economy in Africa, but none of our airports is ranked number two in the number of airports in Africa. We are around number five or six in Africa, which shows that our population has not helped. Our airports are not attractive compared to the other airports because we are so expensive compared to other airports in Africa in terms of operation.”

“It costs so much to push out an aircraft in Nigeria. Nigeria ranks amongst the highest in terms of running costs. Our tickets from here are the most expensive. Anything that goes into increasing the cost again goes straight to the ticket cost or price of the ticket.

“The grouse of the airline is this: FAAN is already charging $100 for an infrastructure ticket charge. That is supposed to cover the baggage system and all the infrastructure at the airport. They are already collecting money for this anyways. Why don’t you apportion the money you are already collecting to this? Again, the NCAA charges $20 security fee for passengers and their baggage. You are already collecting enough money to take care of this. Why do you want to bother the passengers again for another payment, thereby reducing the number of passengers?

The airlines said they have no problem with what the infrastructure would be, but tasked the government to use the money it is collecting to address it.

“That is the simple point of it, and that is the response and position of the airlines. You are already collecting money for it, use the money to address whatever you want to address and don’t put passengers under more pressure. You are already collecting $120. You are the most expensive.”

Wole Shadare