Lagos & Abuja -World’s most costly airports with 27 Levies, says IATA

The International Air Transportation Association (IATA) has stated that the Lagos and Abuja airports in Nigeria are the most expensive airports to operate in terms of levies and taxes.

According to the association's presentation at the ongoing three-day Aviation Summit in Abuja, the Abuja Airport is the most expensive, followed by the Lagos Airport.

Condemning the Nigerian Aviation Taxes

Mr. Kamil Al Alwadi, vice president of IATA for Africa and the Middle East, stated in his presentation that Nigerian airports charge foreign airlines approximately 27 levies, making them the most expensive in the world and discouraging airlines from travelling to the country.

Alwadi criticised the Nigerian government for imposing hefty and varied levies and taxes on airline operations.

He lamented the region's stunted development, particularly in Nigeria, and urged the Nigerian government to foster an environment where airlines can flourish.

"Recently conducted research revealed that the most expensive airport in Africa is Abuja airport, followed by Lagos airport." With these exorbitant fees, Nigerian airlines are unable to compete with their international counterparts.

"Africa has put itself in a position where it cannot help its own, with expensive fuel, exorbitant fees, skyrocketing leasing and insurance costs; the airlines must also be financially sustainable." The airlines contribute to the country's GDP, but Nigeria must determine what to do to ensure their survival," he said.

Opportunities and threats for African Airlines

According to him, Africa will continue to be a difficult market in which to operate an airline, with economic, infrastructure, and connectivity issues impacting the industry's performance. As a result, African-based airlines are expected to incur a moderate loss of approximately $484 million in 2023.

"However, despite the difficulties, the industry continues to move towards profitability in the wake of the COVID disruption, and could be profitable as early as next year.

• The robust demand for air travel underpins this trend. In the second quarter of 2023, and for two consecutive quarters, African carriers had one of the highest annual passenger traffic growth rates in the world, second only to Asia Pacific.
• Even though the region has not yet fully recovered to pre-pandemic levels, African carriers' growth in total and international traffic exceeded the industry average by 38.9 percent compared to the same quarter in 2022.
• The Q2 2023 RPKs were 9.2 percent less than the same quarter in 2019. Despite this continued positive performance, the region continues to face economic obstacles that severely limit the affordability of air travel, as well as a variety of infrastructure issues that limit capacity and impede the development of consistent air service.

He predicted that Africa's passenger traffic will double over the next two decades, surpassing 300 million passengers by 2040 at an average annual growth rate of 3.4%.

"As can be seen, the continent is the region with the greatest aviation potential and opportunity. But this potential is limited by safety incidents, infrastructure limitations, blocked funds, high costs, lack of connectivity, regulatory obstacles, delayed adoption of global standards, and skills shortages, among other factors." He continued.

In addition, the Federal Government has instructed the Central Bank of Nigeria (CBN) to conduct a quarterly reconciliation meeting with it regarding the foreign exchange shortage that is crippling the operations of the majority of indigenous airlines.

The government stated that the quarterly summit would provide updates on the country's foreign exchange crisis and lead to the resolution of all outstanding issues.

Government Programmes for the Aviation Sector

Mr. Festus Keyamo, Minister of Aviation and Aerospace Development, revealed this yesterday in Abuja during his opening remarks at the seventh annual Aviation Summit conference.

In addition to apologising to the affected foreign airlines for their stranded funds, Keyamo assured them that the issue would be resolved as soon as possible.

"The current administration is aware that fluctuations in foreign exchange rates and their availability have hampered Nigerian entrepreneurs in recent years. "This administration is committed to ensuring that entrepreneurs have easy access to foreign currency, and the government has ordered the Central Bank of Nigeria (CBN) to conduct quarterly reconciliation meetings to address this issue.

Additionally, Keyamo unveiled three aviation industry road maps.

Keyamo described the plans for the city, the Maintenance, Repair, and Overhaul (MRO) facilities, and the Aircraft Leasing Company (ALC).

He stated that these are elements of the current administration's priorities.

He also emphasised the significance of these three factors for the growth of the aviation industry in Nigeria and West Africa.

By Charles Ayodele