Nigerian travellers, airlines, others to benefit as Heathrow set to cut taxes

  • UK CAA orders reduction in charges, Abuja, Lagos airports rank highest in charges

 

While Nigeria’s two biggest airports have received a lot of flak, the aggregate of these charges, levies and taxes have taken a toll on air travel and impacted the cost of air tickets both domestically and regionally, as passengers will pay less for flights in and out of Heathrow after the aviation regulator ordered the airport to cut the fees it charges airlines.

On Wednesday, the Civil Aviation Authority (CAA) ruled that Heathrow must cut the amount it charges carriers next year and the year after, imposing deeper reductions than previously announced.

London Heathrow airport

The cap on how much Heathrow can charge carriers this year will fall from £31.57 to £26.78 per passenger, under previously announced changes.

However, the regulatory body has proposed extra reductions in 2025 and 2026, cutting the maximum fees Heathrow can charge by more than previously suggested.

The CAA had previously proposed caps of £25.24 and £25.28 per passenger in 2025 and 2026 respectively. These will now fall further to £23.72 and £23.70.

The reductions will benefit passengers because in practice the fees are passed on to consumers through air fares.

It comes after both Heathrow and some airlines challenged the CAA’s previous cap decision with the Competition and Markets Authority (CMA) last year.

The airport argued for a higher rate of £42 per passenger. However, British Airways, Delta Air Lines, and Virgin Atlantic instead argued it should be lower than £20.

Airlines have accused Heathrow of abusing its market position. Heathrow’s bosses insist higher fees are needed to fund investment in infrastructure modernisation and maintenance.

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Following those challenges, the CMA ruled mostly in favour of the CAA’s proposals but told it to revisit certain calculations.

In the wake of that ruling, the CAA said on Wednesday that it had looked again at the numbers and came up with new proposals “in the interest of consumers”.

The changes include an inflation-linked increase to the cap for 2024, which is increasing by £1.35 per passenger, and further cap reductions of £1.52 in 2025 and £1.58 in 2026.

Nnamdi Azikiwe International Airport, Abuja

In a statement, the CAA said it would consult on the new proposals for six weeks.

A Heathrow spokesman said: “We will review the impact of the CAA’s latest proposals and respond to the consultation in due course.”

IATA’s Vice President (Africa and Middle East), Kamil Al Alwadi, at an Aviation Summit in Abuja ranked the Abuja airport as the most expensive, followed by the Lagos airport.

Although Al-Alwadi did not give a breakdown of what makes the two Nigerian airports in Lagos and Abuja the most expensive in the world, the aggregate taxes and levies could have formed his view based on data available to IATA for disclosure.

Apart from passenger taxes that are levied directly on the ticket, airlines operating from these two facilities have to face many other charges related to their operations at the airport level.

Some of them are high navigational charges,  landing, parking, Common User Terminal Equipment (CUTE), Jetway charge, passenger bus, lighting, counter, fire fighting and prevention, check-in, ground power unit, ground handling, follow-me, hangar, housing, terminal, towing and push-back among others.

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He 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. “Fuel is higher by 30 per cent.

 

Murtala Muhammed International Airport, Lagos

The loans are horrendous. The continent needs to review these issues. “If you want to see Gross Domestic Product (GDP) change, just fix your aviation industry. Doha, Dubai, and the entire United Arab Emirates (UAE) grew from nothing. Airlines contribute to the growth of the economy.”

Mexico late last year tinkered with the idea of reducing an airport usage fee by 8%-12%. Travellers pay the airport usage fee as part of the cost of their plane ticket and operators pocket the funds. It adds about $22 to more than $60 to the price of an international flight and about $8 to $40 for a domestic ticket, depending on the airport.

The reduction of the fees, some of the highest in Latin America, is meant to cut ticket costs for consumers and boost air travel in the country.

The reduced tariffs are part of an overhaul of the five-year plans airport operators have with the government.

The 2021 report of Airports Council International (ACI), Niger, Liberia, Guinea Bissau, Senegal, Bangui, Sierra Leone, the Republic of Congo, and Nigeria top the list of African countries with high airport taxes.

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Niamey, Niger Republic tops the list by charging passengers $162 on regional departure in African airports, followed by Monrovia (Liberia) $145; Guinea Bissau $137; Dakar, Senegal $116; Douala, Cameroon $115; Bangui $111; Freetown, Sierra Leone $109 and Nigeria $100.

International travellers at Bamako, Mali, Antananarivo, Madagascar, Cotonou, Benin Republic, Kinshasa, and Zaire pay $99; $91, $88, and $77 respectively. In Accra, Ghana it costs $77, N’djamena $68, Djibouti $67, Cairo 467, Lome, Togo $62, Entebbe, Uganda is $57. Charges by other African nations oscillate between $50 and $3.

Maseru, Lesotho has the lowest airport tax of $3 followed by Tripoli, Libya $4, Lubombo, Eswatini $7, Khartoum, Sudan $8, Gaborone, Botswana $11 and Tunis, Tunisia $11.

In Central and Western Africa, 10 out of 23 airports, which is almost half, charge more than $100. Thus, the two regions represent only 20% of the global traffic to/from Africa. Most of the Northern African airports which represent 35% of the traffic, charge less than $50.

Central and Western African airports have the highest passenger taxes and fees, which vary from $164.9 in Niamey to $17.1 in Ilha Do Sal.

The five most expensive in Western Africa charge above $100. Passengers in North African airports enjoy the lowest amounts. Cairo charges $67 as passenger taxes and fees, while Khartoum charges only $8.2.

Wole Shadare