Revolutionalising aviation industry (II)
By UMORU IBRAHIM
IF the commitment of federal government in the aviation industry could be critically looked into, there wouldn’t be any doubt that part of the Paul Dike’s reports is being implemented already.
For example the new Civil Aviation Act signed into law by President Olusegun Obasanjo on November 2006, which grants the Nigerian Civil Aviation Authority (NCAA) operational and financial autonomy to regulate the industry, is central in the recommendation of the committee.
On adequate funding of the industry, the committee recommended a minimum capital requirement of N250 million for the first tier airline operating in Nigeria, N500 million for second tier airlines operating within Africa and N1 billion for third tier airline for international airlines. These are parts of the short term approach recommended by the committee.
As part of the short term approach also, the report recommended a review of existing requirement for the insurance of Air Transport Licences (ATL) by the ACAA in compliance with Air Operation Permit (AOP), which will specify the particular tier of operation which the airline is applying.
According to the report, the operator currently holding ATL licenses should be given up to March 31, 2007 to attain a new capital base. It added that those process ATL but are yet to commence operation, should be obliged to meet the new capital base before commence operations, adding that should such airlines commence operations before March 31, 2007, their ATL should automatically be revoked.
The crisis that of late characterized the aviation and the calamity that have befallen the passengers, can hardly be discuss without a great attention to the dilapidated aircraft. In fact, it has been concluded by the most stakeholders in the industry that most of the aircraft flying our sky are those phased out in other parts of the word. It was also a conclusive position of most stakeholders that unless the good-for- nothing aircraft are replaced with modern ones, the frequent air disasters that have evoded the credibility of our country’s aviation security will remain a regular re-occurrence.
It is against this backdrop that the committee recommended that 22 years or 60,000 cycles (at the time of the entry) as the maximum age limit for the airplane imported to be used in Nigeria.
It is important to note that if this section of recommendation is given the attention it deserved, Nigeria’s aviation industry would soon take it rightful position in the global aviation sectors.
Similarly, inadequate funding of the sector remains another militating factors which successive governments had been unable to stem. Billions of Naira are on a yearly bases budgeted for the sector but, alas, no sign of improvement has been experienced.
In dealing with this problem, the committee leaves no stone unturned in seeking to it that adequate provision is made.
In one of it recommendations, the committee stated that “the government should approve a short-term aviation bridge finance of N32.86 billion to up grade the four international airports in Abuja, Lagos, Kano and Port Harcourt to ICAO standard.”
The committee also took other measures to further concretize the financial solid base of the sectors by attempting to look outside the yearly budget allocation of the government.
To this end, the committee wants the government to remove five per cent value added tax and introduce a five per cent aviation development levy (ADL) on ticket sale and cargo charge, as well as create a Nigeria Aviation Development Fund (NADF), 50 per cent of which will be sourced from ADL.
The distribution of fund to the various agencies making up aviation industry also came to the purview of the committee during the deliberations. This aspect of committee’s commitment is fundamental because of the silent war the sharing formula had in past created among these agencies. To put an end to this, the committee recommended a new sharing formula. To this end according to the report, NCAA should have 45 per cent of five per cent ticket and cargo charge, NAMA 30 per cent, NIMET, 10 per cent and NCAT 15 per cent.
Similarly, to ensure a proper control and prompt payment of appropriate taxes by foreign airlines, the committee had recommended compulsorily registration of all foreign airlines operating in Nigeria.
According to the report, the committee was amazed to discover that of all the number of foreign airlines operating in Nigeria. Only Air India and Virgin Atlantic have record of registration with Nigeria Aviation Industry.
This state of affairs is not only unacceptable but ridiculous, especially viewing from the fact that these unregistered foreign airliners are owing aviation ministry over 500 US million dollars. In the report, the committee stated that “during the interactive session the taskforce was told that the federal government is owned an estimate 500 million US dollar by foreign airlines in an unpaid task.
Also, series of encroachment in FAAN areas of operations have been known to be a major operational hindrance to the smooth running of the authority. To stem the tide of this, the committee has recommended that “FAAN should review its airport master plans for the medium terms of five years and long-term of 20 years to forestall encroachment.