The Honourable Minister of State for Aviation, Senator Hadi Sirika has pledged his commitment to work closely with Airline Operators of Nigeria (AON) and has taken bold steps to address the challenges being faced by domestic airlines in the country. Sirika made the commitment when he metwith members of AON on Monday June 6, 2016 to discuss their concerns and highlight the many challenges affecting their businesses which bother on safe flight operations.
In a paper titled:“Airline Of Nigeria Critical Points To The Honourable Minister Of State Aviation”theAON Chairman, Capt. Nogie Meggison, noted five (5)major challenges facing domestic airlines include constraints to foreign exchange (Forex) access; availability, pricing and distribution of Jet A1; Taxes on importation of aircraft and its spare parts as well as other multiple taxes including VAT; obsolete infrastructure; upgrade of airport runways for 24 hours operations with navigational and landing aids; as well as 24hours customs clearance of spare parts for aircraft on ground (AOG) among others.
The Minister assured operators that he was not oblivious of their plight and challenges. “The players in the industry are known. Their challenges are also known, at least to me. And I am trying and working hard to drive this through government for government to understand them,” he said. “Our primary purpose in government and my duty as Minister is to promote, protect, and develop businesses,” he added.
On the issue of Forex to domestic airlines, Sirika noted: “its common sense that you buy your airplane in hard currency, you maintain the airplane in hard currency, you buy the spares in hard currency, and even the fuel at some point is purchased in hard currency. So you must be able to access hard currency to operate as an airline.” He therefore took the pains in an unprecedented manner to leada delegation of AON members to the Central Bank where the Governor agreed thatdomestic aviation is a pivot to the Nigerian economy and critical to jump starting a slowing economy.He also noted that aviation can contribute to the GDP and create jobs for our alien youths and that access to foreign exchange for spare parts is critical to remaining within the safety envelope of operation. The CBN Governor therefore pledged to include aviation on the priority list in an effort to support domestic airlines safetyand their operations.
With regards to Jet A1 the Minister said he had met with the Minister of State for Petroleum Resources who mentioned that they would try to get Port Harcourt refinery on-stream before the end of the year to begin to refine Jet A1, and also that with some investment they would get Kaduna back on-stream so that the more they refine the more the fuel will be available.“We are committed to it, we will begin to produce it and if there is anything we can do to bring down the price we will do so. The whole essence of refining it locally is not only to make it available, but it will also make it cheaper. Because then the element of importation is removed,” Sirika assured.
As far as direct distribution of Jet A1 to the airport is concerned the Minister noted that alternatively, as part of government’s efforts to concession the airports, “we can cause the concessionaire to ensure that the infrastructure is developed around those airports especially that of Lagos, Port Harcourt, Abuja and Kano.
With regards to taxes on aircraft and spare parts, the Minister observed that while the Ministry of Finance says there should be no duty on aircraft and spare parts, the Nigeria Customs thinks that the waiver is only on aircraft itself and not on the spares.To this end therefore, the Minister again leda 3-man delegation from AON to visit
the Comptroller General (CG) of Customs to find a meeting point of getting a clear interpretation of the Importation Act,as a way of assisting domestic airlines.
“It is the spares that we are more interested in because they are the consumables. The life of an airplane might consume in terms of price money more spares than the actual cost of the airplane;so it ought to be the two,” Sirika noted. The CG of Customs also gave assurances to look seriously into the issue of a24hours clearance of spares for Aircraft on Ground (AOG).
Committing to a closer working relationship with AON, the Minister said; “Aviation will contribute to the creation of wealth and it is contributing at the moment. But the relationship between AON and us will ensure that the wealth is improved until the contribution of aviation has gone up significantly to 15% contribution to theGDP. This is something that we must agree on and something that we have to work together to achieve.”
