AON Raises The Alarm, Says 27 Indigenous Airlines Insolvent In 25 Years‎

Airline Operators of Nigeria (AON), an umbrella body of airline operators in the country has raised the alarm over the ordeals and consequent collapse of airlines in the country, stressing that the death of the airlines are due to multiple charges by the authorities.
AON stated that they have been complaining about the same issue over the years that have culminated in sending over 27 airlines under in the past 25 years.
In this time of economic recession, AON lamented that it is unfortunate that the system has failed to recognize airlines area pivot and one of the pillars to jumpstart the economy of Nigeria of today out of the recession.
The airline operators in an official statement issued yesterday, signed by the Chairman of Airline Operators of Nigeria (AON), stated that, the system is continuously manipulating, feasting and pushing the financial envelope of airlines by inflicting multiple taxes, charges and levies to the extent that airlines are now groaning under the pressure and some are going bankrupt
A case in point, AON pointed out is the recent takeover of Arik Air and Aero Contractors by the Asset Management Corporation of Nigeria (AMCON)in the face of huge financial burdens that have shown themselves as fallout of the multiple and sometimes unfair charges, levies and taxes airlines are forced to grapple with on a daily basis.
This is without recourse to the fact that aside from all the multiple charges, levies and fees, airlines still have to pay mandatory statutory corporate taxes to relevant agencies,
Speaking on their ordeal, Sir Meggison said “Ordinarily, airlines meet so many costly foreign exchange components on daily basisthat accounts for 70 per cent to 80 per cent of their direct operational costsuch as Jet fuel, spare parts, insurance and simulator training among several others” .
AON emphasised that it is unfortunate that domestic airlines have become a cheap target for the agencies thatareputting additional pains and burden on operators through multiple taxes, charges and levies which they demand from airlines with impunity.
The professional body commended President Buhari administration for approving the implementation of the provision such that aircraft goods and spare parts have zero duty. It however, pointed out that the law is not being fully applied by the relevant agency to commercial air transportation which is a critical service to drive the economy.
“We would like to appeal to the Federal Inland Revenue Service (FIRS) to also considerextending to the domestic airlines as it does for foreign airlines. While foreign airlines don’t pay VAT on Ticket Sales, Domestic airlines are compelled to pay VAT on ticket sales. Also, Road, Rail and Inland Water Ways do not pay VAT, but Domestic Commercial Airline Transportation pay VAT. We strongly appeal to FIRS to urgently reconsider the situation”, it stated.
AON equally called for an urgent need for a total harmonization of all agencies’charges into a one-stop shop payment system.
Other areas, AON wants the government to come in, include taxation, exception of air transport from VAT, removal of enroute and terminal navigational charges for domestic airlines as done globally, provision of airfield lighting and navigational landing aids at all airports in Nigeria, granting waivers of landing charges in the home-base of airlines.
It also wants the government to extend tax holidays for the first ten (10) years for qualifying airlines in order to cushion the impact of start-up to ensure the survival and growth of domestic airlines and that all the charges should be streamlined to a single fixed charge windowto be distributed between the agencies using an agreed formula.

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