Domestic airlines condemn FG’s model for new national carrier

Nigeria’s domestic airlines have condemned the modalities being adopted by the federal government in setting up the proposed national carrier saying the process was inimical to the general interest of private entrepreneurs principle.

The airlines under the aegis of Airline Operators of Nigeria (AON) through its Chairman, Captain Nogie Meggison after a meeting of airline chief executives yesterday argued that using taxpayers money to set up the national carrier was unfair to private entrepreneurs who had invested their hard earned money, time and effort to float their airlines.

The proposed national carrier, the body said will only result in a huge distortion of the current market and further create an unlevel playing field to the detriment of the industry.

According to Meggison, members of the domestic airlines have however resolved to stop Value Added Tax ( VAT) remittances collected from passengers to the Nigerian Civil Aviation Authority (NCAA) henceforth, describing the VAT collection as unfair and debilitating to Nigerian passengers and the industry.

He attributed the AON’s decision to stop the remittance to the fact in that domestic air travel was the only mode of transportation subjected to VAT in Nigeria insisting that VAT on airline ticket sales for domestic carriers must be removed completely forthwith as road transportation, rail, marine and international airlines are not subjected to it.

Besides creating distortion in the air travel market, Meggison said the imposition of VAT was resulting in airlines not being able to optimize their aircraft threatening that the domestic airlines will shut their operations should the government refuse their decision to stop VAT remittances.

While accusing the government of giving preference to two carriers; Aero and Arik under receivership by the Asset Management Corporation of Nigeria ( AMCON), the AON Chairman cited how the two domestic carriers were exempted from paying prescribed navigational and airport charges.

The AON said the continuous running of Arik and Aero with taxpayers money was creating distortion in the sector as the two carriers engage in a price war to the detriment of other private sector managed airlines.

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Wondering how other carriers will compete with Arik and Aero which he said are currently charging low fares, the AON challenged Minister of State for Aviation, Hadi Sirika to be transparent in his bid to deliver the national carrier by being consistent with the promise that it will be private sector driven.

“If Sirika promised that it will be a private sector-led national carrier, why are heads of government agencies members of the committee to fast-track the setting up of the airline.
What is the business of the civil aviation authority in the setting up of a national carrier, which is supposed to scrutinize?.

” What then is the responsibility of the transaction advisers, if Sirika has gone ahead to set up a committee to deliver the national carrier. Why did he not invite private airlines to indicate interest? There are a lot of questions bordering on clarity and transparency that Sirika has to answer on the national carrier. Moreover, the model of the national carrier is no longer fashionable worldwide as countries now designate flag carriers.”

Speaking on multiple entry points for foreign carriers, the AON called on the government to restrict them to two points even as it urged foreign carriers to explore interline options with domestic carriers.

The AON said unless the government addresses issues bordering on customs duty waiver for commercial aircraft; unhindered availability of aviation fuel from reliable sources at competitive prices; and multiple charges by aviation agencies the growth of domestic airlines will remain a mirage.

“In view of the above, the AON is calling on the government to review its policies on these matters and address our concerns as enunciated in the position paper presented to the Presidential Task Force on Aviation by AON.”