Nigeria: Airlines May Shut Down Operations Over Non-Implementation of Waivers On Duties

19 March 2021

The Chairman of Air Peace and Vice-Chairman of Airline Operators of Nigeria (AON), Chief Allen Onyema, has stated that domestic operators may be forced to shut down service due to high duties charged them by the Nigerian Customs Service (NCS).

Onyema said President Muhammadu Bubari, in his magnanimity, granted the airlines waivers on customs duties on aircraft and spares through executive order last year, but NCS has refused to implement the policy.

He said the Buhari administration signed the waiver policy to enable airlines survive the devastating effect of the COVID-19 pandemic on airlines, but Customs still charges duties between 10 and 35 per cent of the cost of aircraft and spare parts which the airlines must pay before they receive their equipment.

Onyema noted that while waiting for the duties to be paid, Customs could hold on to the imported equipment for months, thus denying the airlines the chance to use their aircraft.

The Air Peace boss made this known yesterday during the arrival of its second brand new aircraft, E195-E2, from Embraer factory in Brazil, which landed at the Nnamdi Azikiwe International Airport, Abuja.

He noted that the federal government had since 2016 been granting airlines duty waivers, but the NSC had continued to repudiate the policy, prompting the Buhari administration to sign the executive order on zero-duty for all imported aircraft and spare parts in 2020.

Onyema said instead of managing the aircraft without spare parts, which may give rise to safety breach, the airlines might consider shutting down operations until the Customs begin to implement the federal government zero-duty policy and release the spares held down in their facilities.

According to him, "I want to thank the Minister of Aviation, Senator Hadi Sirika, for the revolution he has brought in the aviation industry.

I also want to thank President Buhari for removing VAT from the importation of aircraft, for removing custom duties from the importation of aircraft a as well as removing VAT from ticket fares.

The president has done very well for the aviation industry by signing into law these demands that we presented to him. He didn't waste time. It shows that the president is desirous and ready to support indigenous investments in this country. This is something that we are very proud of.

"But I plead with the federal government to talk to the Customs to feel the pulse of the president and his government. We must always do things that will reduce the name-calling or bad-mouthing of a particular regime. The Customs know very well that waivers have been signed into law yet I have an aircraft on ground for over one month because the engine which was imported is with the Customs because of duties. I paid over $1 million insurance on the aircraft. This is a company with a staff strength of over 3,000 people, our spare parts and engines will come into this country and Customs will keep them, giving us all manner of reasons."

On the second brand new aircraft that was received, the Air Peace chairman explained that the airline decided to go for Embraer 195-E2 after meticulously studying it."We became the first in Africa to pay for 13 brand new planes, and we would be acquiring 17 more to make it 30. These planes shall be deployed to domestic and regional routes. These jets are the best. If all the powers shut down while about 30 feet above sea level, equipment is deployed automatically and the plane lands effortlessly. The aircraft speaks to the pilot and the pilot speaks to it too. By the time we get everything, we would be providing 8,000 jobs to Nigerians," he said.

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