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Shocker! Airline operators reject national airline project
- Fault members’ exclusion from committee for national carrier
- Set to stop VAT remittance to FG
Airline operators under the aegis of Airline Operators of Nigeria (AON) rose from a meeting with a consensus among them that national carrier which the Federal Government may have concluded plans to set up by December this year was not only unnecessary but ‘counterproductive.
This recent criticism of national airline is coming at a time majority of Nigerians are clamouring for a national airline at a time many of the flag carriers have failed to operate profitably, with the lifespan of many of them not exceeding ten years.
The operators said the AON is at a loss as to the relevance and need of a national carrier at this point in time in the history of the nation.
The media briefing which had in attendance Chairman of AON, Capt. Noggie Meggison, Executive Director Overland Airways, Mrs. Aduke Atiba; Overland Airways, Mr. Trancis Anwana and Executive Director, First Nation Airways, Capt. Chimara Imediegwe, Managing Director, Dornier Aiation, Member, Airline Operators of Nigeria (AON), Mr. Mark Snoxell and Managing Director, Topbras Aviation, Member,AON, Capt. Roland Iyayi among others unanimously urged government to stop the project.
They stated that whilst the AON is not averse to the government providing a conducive operating business environment and a level playing field for the establishment of a private sector driven flag carrier, the idea of using Tax Payers money to float a “National Carrier” in 2018 is not only counterproductive, but inimical to the overall interests of the present corps of private entrepreneurs.
The AON Chairman said there should be a level playing field and transparency in the operations of the planned national carrier.
He said if the federal government is sincere about the establishment of a national carrier; their members should have been invited to come and take equities in the national carrier.
Meggison pointed out that bringing the director general of the Nigerian Civil Aviation Authority, the industry regulator to be part of the committee to set up or run a private sector national carrier is a misnomer that should not happen anywhere.
” In the overall scheme of things, “National Carrier” can only result in a huge distortion to the current market and will be a huge drainpipe to government’s treasury.
“In this regard therefore, we urge the federal government to provide clarity on the agenda whether it’s for job creation or for profit as well as steps being taken in the establishment of this “National Carrier”, especially when viewed against the background that the Minister of State Aviation has indicated that this airline will commence operations on December 24, 2018. Moreover, this model is no longer practicable worldwide as in the 70s 80 percent of the airlines in Europe were government owned airlines. Today 98percent of the airlines have been privatized,” he said.
Arising from a meeting attended by the management of majority of the country’s domestic airlines, the AON stated that the deadline is not only for the benefit of the airlines but also to attract more passengers back to the airports.
Equally annoying to the operator is Value Added Tax (VAT) deducted on airline business in the country, stressing that the Nigerian domestic airline travel is the only mode of transportation that is subjected to the Value Added Tax (VAT).
He however said airlines have resolved to stop the remittances of VAT to the federal government from June 14.
Meggison said this imposition creates a suppression of domestic airline travel demand; resulting in airlines not being able to optimally utilize their aircraft assets thereby creating a market distortion.
According to him: “The AON’s position is that the VAT on airline ticket sales for domestic carriers must be removed completely forthwith as road transportation, rail, marine and international air travel carriers are not subjected to VAT.
Moreover, a situation whereby some airlines are paying VAT while some other privileged airlines are not paying VAT and the VAT which we pay is being used to subsidize our competitors against those that are making payment is unfair”.
On the issue of Customs Duty, Meggison explained that while the government has provided for Zero Customs Duty on Commercial Aircraft, Spares and Engines, the industry is yet to fully benefit from the provision.
He said this has resulted in airlines having some of their aircraft fleet grounded for days in some cases, thereby resulting in cancelled flights which in event results in chaos at our airports to the displeasure of our esteemed customers.
The AON Chairman added that this situation is unacceptable and should be reversed forthwith.
He urged the federal government to immediately institute the necessary mechanisms to ensure that the Customs Duty Waiver to Commercial airline operators as proposed and agreed should be fully effected.
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