FG to grant 10 years tax holiday to infant airlines — Pundits

AT 55, Nigeria’s indigenous airlines are still operating at infant stage without any sign to make progress. Pundits in the industry are worried that the Federal Government is failing to realize the importance of aiding the airlines with the needed “baby milk” for them to grasp the full potentials in the air transport business alongside their foreign counterparts.
A former scribe of the defunct Nigeria Airways, Mr. Chris Aligbe, has opined that the government should declare the struggling airlines as “infants” and grant them 10 years tax holiday, among other lifelines, to help the airlines grow. According to him, the government has the right to rescind the decision if, after the 10 years are exhausted, the airlines fail to make meaningful progress as expected.
“I have said and I will say it over again, our airline industry is still operating like infant industry. They are perpetual infants; they are not growing. So, first and foremost, it is for us to recognize this and then declare the industry an infant industry. If you want to declare it an infant industry, there is a status you create; an infant industry status is such that you say, look, because this is an infant, we will still give it baby milk for the next number of years, we will still provide soft landing for the next number of years in this area and in this area. There are many areas they are going to work on, like tax holiday, you can give tax holiday for 10 years and say this 10 years are enough for you to grow. That has happened in many places, including the textile industry,” Aligbe said.
According to him, the 10 years tax holiday will help the airlines to import the materials they need at reduced customs duties. So many things can come under an infant industry status, said Aligbe.
“If you say today, we have declared this industry an infant industry status, any new operator or any existing operator will stay under this status for 10 years and after 10 years if you have not been able to grow, sorry it means you cannot grow. But those that can grow within these years enjoy these privileges, which include tax holiday, none payment of VAT, reduced duty for whatever you require.”
Aligbe insisted that even when the much anticipated national carrier comes to reality, the country still needs vibrant flag carriers that are privately owned in order to stand against the harsh competition posed by foreign giants. He said private airlines are not mutually exclusive. “That is why those fighting against national carrier, private operators fighting against national carrier are making a mistake. They are making a mistake because they are looking at it as if two of them are mutually exclusive, but they are not mutually exclusive.
He explained that British Airways has been operating alongside Virgin Atlantic for decades even though one is government owned and the other is private. The two have been complementing themselves for growth. This can be achieved in the Nigeria because “the national carrier cannot do all that we need it to do, just like private carriers are not being able to do all that we want them to do,” Aligbe added.
Meanwhile, other experts have attributed the situation to undue interference in the activities of the regulatory agencies and lopsided air services agreements brought upon by a sick aviation ministry.
President of the Airline Operators of Nigeria (AON), Capt. Nogie Meggisson, also observed that the industry was still at its infancy stage and does not have a clear direction of its vision.
He said since the country gained independence, the air transport industry hasn’t made meaningful progress to be reckoned with. According to him, Nigerians and airline operators are hoping that this incumbent administration will look at aviation and wake up the sleeping giant with all seriousness by committing the required resources to it.
Meggison noted that the aviation industry can contribute to the nation’s GDP and create employment but the government has just put it in a comatose position, where it is not adding value to the country. According to him, the bulk of the money generated in the industry is taken out of the country by foreign airline operators.
He, however, expressed optimism that the administration of President Muhammadu Buhari will bring about the desired change in the industry by appointing an aviator to head the aviation ministry.
Following the same line of thought, Retired Capt. Dele Ore, a former President of the Aviation Round Table (ART), said Nigeria should review its Bilateral Air Services Agreements to create room for the local content in the global aviation business.
“Everything is now in the hands of the government to make the industry favorable for our domestic airlines so that they can compete. The policies on ground are hampering their operations, especially the issue of multiple entry points. The domestic carriers have a low revenue base because of that,” Ore explained.
According to him, the indigenous airlines should have the capacity to be in some global alliances but that is missing now. The only way to revert this unfortunate situation is by addressing policy defaults without political interference.
Ore called for full autonomy for the Nigerian Civil Aviation Authority (NCAA), to enable the regulatory agency to perform its statutory duties more efficiently.