Airplanes at the airport
Chief Executive of Mish Aviation, Ghana based flying school, Ibrahim Mshelia, has said the zero tariff proposed by President Jonathan in the 2013 budget presented to the National Assembly last week would help those who have already invested in the airline subsector to invest resources that would be saved by the removal of tariff to other related areas.
Mshelia, who commended government’s action, remarked that Jonathan’s administration could also be magnanimous in other areas, including making aviation fuel available and the price relatively cheaper than it is presently sold to the airlines.
He told THISDAY in a telephone interview that by removing Customs duty, government has saved money for the airlines, estimated at N11 billion annually, which they could spend on pilots training, acquisition of new aircraft or even establishing a training school.
“I, on behalf of those who share my view, say it loud and clear that I thank government for this effort and will remain grateful for all those who have worked to make government consider applying this zero duty. For example, if an airline was to buy an aircraft for $50 million and the duty was only 2.5 per cent which I think the on-going tariff is more, the airline instead of looking for $1,250,000 to pay duty, will now convert that into other issues that will either support expansion or infrastructural development or whatever the airline wants. “
He also said that airline operation is unprofitable in Nigeria because of the huge taxes paid by the operators, including Customs duties, noting that with the waiver, the industry would attract more airlines which will make the market more competitive.
Mshelia also appealed to government to look into other areas that would benefit the industry, observing that there are still a few issues that government could do to make the airline industry viable and help the growth of the nation’s economy.
He said that making aviation fuel, known as Jet A1, available always is very important for the industry and monitoring its storage and its price regime is also key, advising that such issues should be discussed between the oil marketers, airline operators and the government.
Another important area he said government should enhance is the establishment of aircraft maintenance hangar in the country, adding that although government should not invest in such project, it can provide incentives to would be investors with tax holiday and provision of land space for the construction of the facility.