AON Urges President to Launch Review of Airline Taxes and Fees
The Airlines of Nigeria (AON) has called on President Bola Tinubu to form an independent commission tasked with reviewing the tax structure and fees within the airline sector. The organization has raised concerns that high taxation is a significant factor contributing to the collapse of several Nigerian airlines.
During an interview on Arise TV, Allen Onyema, the vice-chairman of AON and chairman of Air Peace, highlighted the unsustainability of certain fees, notably the 5% passenger service charge imposed by the Nigerian Civil Aviation Authority (NCAA). Onyema stated that these costs are not justifiable and need immediate reassessment.
Onyema emphasized the burden of the 5% service charge, noting, “If I charge N100,000, the NCAA takes 5 percent of that money. We have not entered into business with them.” This assertion underscores the industry’s pressing need for a more favorable fiscal environment to enhance its viability.
Proposal for an Aviation Tax and Fee Review Board
He further urged the establishment of an Aviation Tax and Fee Review Board, comprising independent experts, technocrats, and industry leaders. “This is crucial for the survival of many airlines in the country,” he stressed, pointing out that these levies often threaten the survival of domestic carriers.
The NCAA had previously placed 11 domestic airlines on a “no service” sanctions list due to outstanding obligations, though enforcement was suspended following an outcry over escalating operational costs and the industry’s stability. This situation reveals the fragility of the Nigerian airline sector, which is currently grappling with significant financial challenges.
Financial Strain on Domestic Carriers
The urgent call for review arises amidst growing tension regarding the financial landscape of domestic airlines. Reports indicate that many are increasingly dependent on bank loans to sustain operations, particularly in light of surging aviation fuel prices. Despite a recent drop in the price of Jet A1 fuel from Dangote Oil Refinery, airlines are still resorting to substantial borrowing to remain operational.
Xenophobic Violence Sparks Economic Boycott Proposal
Beyond aviation issues, Onyema has also called for a non-violent economic boycott of South Africa in light of ongoing xenophobic attacks against Nigerians and other foreign nationals. He condemned these acts while firmly rejecting retaliatory measures against South African businesses operating in Nigeria.
Onyema expressed his discontent with the South African government’s repeated failure to protect foreign residents during outbreaks of xenophobia, asserting that relative inaction from authorities is baffling. His comments reflect a growing frustration among Nigerians regarding their safety abroad.
Encouraging Investment Instead of Retaliation
Despite the tensions, Onyema urged against targeting South African-owned enterprises in Nigeria, pointing out the significant investments made by Nigerians in these companies. He emphasized the importance of fostering mutual economic growth rather than resorting to divisive actions. “I don’t want Nigeria to shut down MTN or any other company,” he stated, advocating for economic strategies that build bridges, not walls.
He believes a more effective approach would be to withdraw economic support from South Africa, suggesting that this stance could send a potent message without resorting to violence or protests. “If you decide to go against me, the only thing I can do for you is to withdraw my support from you,” he said, highlighting the strength of peaceful economic actions as a form of retaliation.
