Airlines Earn N3.5 Trillion Annually from Nigeria

07 Dec 2012

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 Lagos airport

Chinedu Eze

The total amount of revenue generated by foreign and domestic airlines, charter services and cargo operations in Nigeria is over N3.5 trillion or $25 billion annually, THISDAY has learnt.

These revenues come from passenger tickets, cargo freight charges and payment for charter services, while government operators or service providers, including the Federal Airports Authority of Nigeria (FAAN), the Nigeria Civil Aviation Authority (NCAA) and the Nigeria Airspace Management Agency (NAMA) earn about N300 billion or $2 billion annually from passenger service charge, landing and parking, navigational charges and others.

The former Commandant of the Murtala Muhammed International Airport, Lagos and aviation security expert, Group Captain John Ojikutu (rtd), who revealed this, said government should be aware of these facts before deciding on how to assist the domestic airlines acquire new aircraft for their operations.

Ojikutu argued that whichever way government wished to assist the airlines acquire new fleet it must first of all open their financial books for audit and put in place economic regulation regime for the operators.

“Don’t forget airlines had accessed N300 billion initially through the Central Bank of Nigeria and the Bank of Industry to settle debts owed to the banks and service providers, how many of them used the money for that purpose? Do you think they will honour the loan obligation of the $300 million on refleeting without economic regulation and financial audit of their books in accordance with the Civil Aviation Act? Don’t be deceived, this intervention is as good as another bazaar for the airline operators,” Ojikutu said.

He said that government should ensure that necessary safety and security infrastructure are provided and the airlines’ operations and business are regulated.

“Allow private investors in the industry, give concessions or free taxes on charges on airlines on landing and parking, navigational charges and others, reduce multiple landing for foreign airlines to our international airports to create markets for domestic airlines. If government does these, the industry will grow. Airport remodelling, national carrier or government financial intervention cannot individually or collectively grow the industry,” Ojikutu observed.

The Minister of Aviation, Stella Oduah, in an exclusive interview with THISDAY recently, set out the criteria for assisting domestic airlines acquire modern aircraft. She said the intervention fund would not follow the old pattern where the airlines were not properly held accountable and they were able to divert the money to other ventures.

“There is a paradigm shift there. The money will not go to the operators; the money will go to the aircraft manufacturers who will in turn bring these aircraft for us here and we have criteria again that the potential airline operators must have to scale through. It has to do with the professionalising their operations.

“It has to do with good governance, it has to do with several things, including ownership structure, because we want efficient and functional airlines, as that is the only way we can have safe aircraft flying in our airspace. This is what we promised Nigerians and that is what Nigerians will get,” the Minister said.

Tags: Business, Nigeria, Featured, Airlines

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