Sirika Assures Domestic Airlines Of Close Working Relations
The Minister of State for Aviation, Senator Hadi, has pledged his commitment to work closely with Airline Operators of Nigeria (AON) to address the numerous challenges bedeviling the domestic airlines in the country.
Working closely with AON, the Minister stated would make aviation contribute to the creation of wealth compared to its contribution at the moment, adding that the relationship between AON and the Ministry would ensure that aviation contributes 15 per cent to the country’s Gross Domestic Product (GDP).
In his words, “This is something that we must agree on and something that we have to work together to achieve.”
Sirika made the commitment at a meeting with members of AON to discuss the concerns of the operators which bother on safe flight operations.
The AON Chairman, Capt. Nogie Meggison, in a paper titled, “Airline of Nigeria Critical Points to the Honourable Minister of State Aviation” pointed out five major challenges facing domestic airlines.
He listed the challenges to include constraints to foreign exchange (Forex) access, availability, pricing and distribution of Jet A1, taxes on importation of aircraft and its spare parts, other multiple taxes including Value Added Tax(VAT), obsolete infrastructure, upgrade of airport runways for 24 hours operations with navigational and landing aids as well as 24hours Customs clearance of spare parts for Aircraft On Ground (AOG) among others.
Sirika assured the airline operators that he was not oblivious of their plight and challenges.
According to him, “The players in the industry are known. Their challenges are also known, at least to me. And I am trying and working hard to drive this through government for government to understand them,” he said. “Our primary purpose in government and my duty as Minister is to promote, protect, and develop businesses.”
On the issue of Forex to domestic airlines, Sirika said, “its common sense that you buy your airplane in hard currency, you maintain the airplane in hard currency, you buy the spares in hard currency, and even the fuel at some point is purchased in hard currency. So you must be able to access hard currency to operate as an airline.”
He took the pains in an unprecedented manner to lead a delegation of AON members to the Central Bank where the Governor ,Godwin Emefiele agreed that domestic aviation is a pivot to the Nigerian economy and critical to jump starting a slowing economy.
He also noted that aviation can contribute to the Gross Domestic Product (GDP) and create jobs for our alien youths and that access to foreign exchange for spare parts is critical to remaining within the safety envelope of operation.
The CBN Governor, Godwin Emefiele pledged to include aviation on the priority list in an effort to support domestic airlines safety and their operations.
On aviation fuel also known as Jet A-1, the minister, said he had met with the Minister of State for Petroleum Resources, Dr Ibe Kachukwu , who mentioned that they would try to get Port Harcourt refinery on-stream before the end of the year to begin to refine Jet A1 and also that with some investment they would get Kaduna back on-stream so that the more they refine the more the fuel will be available.
In his words, “We are committed to it, we will begin to produce it and if there is anything we can do to bring down the price we will do so. The whole essence of refining it locally is not only to make it available, but it will also make it cheaper. Because then the element of importation is removed.”
Speaking on taxes paid on aircraft and spare parts, the Minister observed that while the Ministry of Finance says there should be no duty on aircraft and spare parts, the Nigeria Customs thinks that the waiver is only on aircraft itself and not on the spares.
Based on this conflict, the Minister again led a 3-man delegation from AON to visit the Comptroller General (CG) of Customs ,Col. Hameed Ibrahim Ali (rtd) to find a meeting point of getting a clear interpretation of the Importation Act,as a way of assisting domestic airlines.
“It is the spares that we are more interested in because they are the consumables. The life of an airplane might consume in terms of price money more spares than the actual cost of the airplane;so it ought to be the two,” Sirika noted.
The CG of Customs also gave assurances to look seriously into the issue of a24hours clearance of spares for Aircraft on Ground (AOG).