IATA ‘Worst Airline Business’ Ranking: Tinubu’s Intervention Will Change Narrative – Onyema

The chairman and chief executive officer of Air Peace Limited, Dr Allen Onyema, has expressed confidence that Nigeria’s negative ranking by the International Air Transport Association (IATA) as the worst place in the world to establish an airline business will change once President Bola Ahmed Tinubu is properly briefed on the factors responsible for the situation.

Onyema, who is also the vice president of the Airline Operators of Nigeria (AON), said President Tinubu’s intervention in the aviation sector, particularly the ongoing dispute over the five per cent Ticket Sales Charge (TSC), could save indigenous airlines from the financial crisis threatening their survival.

Speaking as keynote speaker at the 30th annual conference of the League of Airport and Aviation Correspondents (LAAC) in Lagos, themed, “Towards a Sustainable Aviation Industry: Balancing Government Revenue Demands with Sector Growth,” Onyema said the high cost of operating airlines in Nigeria had made it increasingly difficult for indigenous carriers to survive and grow.

He said the current system under which airlines remit five per cent of the cost of each ticket to the Nigeria Civil Aviation Authority (NCAA) was fiscally constricting operators, stressing that the charge should be replaced with a fixed amount attached to each ticket.

According to him, a flat-rate TSC would make the payment system more predictable and sustainable for airlines while also protecting the revenue interests of the NCAA and other aviation agencies.

Onyema said the persistent high mortality rate of Nigerian airlines could only be reversed through an amicable tax and charges regime that would create a “win-win” situation for airlines, government agencies and passengers.

He said, “One thing I must say is that I’m certain any day President Bola Ahmed Tinubu sees us, if they allow us to see him, because I know he will not mind to meet with us, that will be the day a new revolution in the airline industry in this country will occur because Mr. President abhors anything capable of affecting indigenous businesses that provide jobs for the people adversely.

“I remember when we complained to the Comptroller General of Customs, Mr. Adewale Adeniyi, of the debilitating effects of the newly introduced four per cent FOB customs duty on airlines. He, Wale Adeniyi, took it up with the presidency same day. I was there in the Presidential Villa with the Customs boss, a fantastic man.

“This President acted swiftly and waived it for airlines within hours of being made to understand the would-be effects of such a charge on the viability of indigenous Nigerian airlines.”

Onyema described the Comptroller-General of Customs as a revenue official who also considers the broader economic interests of the country.

He recalled that after he explained the impact of the four per cent FOB levy on airlines, Adeniyi immediately took up the matter with the presidency.

“The Customs boss is a man who thinks about the overall wellbeing of the country, not just revenue. He asked me, ‘Is it going to hurt airlines?’ I said, ‘We are already bleeding. This four per cent will hurt us.’ He said, ‘Okay, let’s go see the President.’

“This man helped to save Nigerian airlines. Within 24 hours, the four per cent was removed. That is the power of listening. President Tinubu is a listening President,” he said.

The Air Peace boss said the major problem was that President Tinubu had not yet heard directly from airline operators on why IATA had described Nigeria as an extremely difficult environment for airline businesses and compared the country with Afghanistan.

“The problem is that the President has not heard from us on why his country was so described by IATA, who equally compared Nigeria to Afghanistan.

“When he does see us, aviation will flourish in this country. It will benefit the agencies, the government, and the flying public,” he said.

Onyema argued that the continued imposition of multiple taxes, levies and charges on airlines was undermining the growth of the industry, warning that Nigerian carriers could not become globally competitive under the existing cost structure.

He said a review of the TSC regime would not only ease the financial pressure on airlines but could also strengthen the revenue position of aviation agencies in the long run.

The Air Peace chairman also recalled that following the removal of the four per cent FOB levy on airlines, he had pledged to create 1,000 jobs for Nigerians.

According to him, 78,000 Nigerians applied for the positions, out of which 1,000 young Nigerians were eventually employed in fulfilment of the promise.

He further cited the high mortality rate of Nigerian airlines as evidence of the urgent need for government to reform the sector’s tax and charges structure.

Onyema said reports indicated that at least 62 commercial airlines had collapsed or defaulted in Nigeria since independence in 1960, with more than 22 operators shutting down within a recent 24-year period, largely amid a challenging operating environment.

He said the situation had been compounded by the high cost of aviation operations, multiple government charges and other financial pressures confronting indigenous carriers.

“At several aviation fora, IATA has identified Nigeria as one of the most expensive countries in the world in which to operate an airline, citing high operational costs that continue to challenge the viability and growth of local carriers.

“The association has reiterated that the high-cost environment has made it difficult for Nigerian airlines to remain competitive and profitable, limiting the sector’s ability to reach its full potential.

“They wondered how Nigerian airlines survive and even compared Nigeria to Afghanistan, which is not good for our country’s image,” Onyema added.