How To Reduce Airlines’ Cost, By Capt Mshelia
The Chairman of Mish Aviation Limited and West Link Airlines, Capt Ibrahim Mshelia says the huge cost burden on airline operations will reduce if the Federal Airports Authority of Nigeria (FAAN) reviews its levies and taxes on airplanes, while the airlines handle themselves, if duly certified to do so.
Speaking at the 25th Annual Conference of the League of Airport and Aviation Correspondents (LAAC) held at Sheraton Hotel, Ikeja, Lagos under the theme. Aviation Industry In Nigeria: Management, Policy & Regulation, Mshelia said: “The Federal Airports Authority of Nigeria (FAAN) has its defined roles: which include provision of security and screening, offices and counters for airlines at the airports, the runways and tarmac to land and park aircraft, the conveyance of the passengers to and from tarmac etc.
We also have to start thinking of arriving at a fair levy for these services. The huge burden of cost on operations weigh down too heavily on airlines. We should also start thinking of a very fair operational ground that will allow airlines to register to handle itself to taste.
The idea of being forced to patronize the handling companies, which services, sometimes do not measure up to the niche or standard of airlines has caused many airlines to lose their passengers.
I hereby suggest that airlines that can bring buses that will measure up with the standard of the CAA should be allowed to do so, as well as provide other handling jobs that they can provide to standard
If FAAN has the building which they collect charges on, collect passengers service charges and part of ticket sales, the airlines also pay taxes, I think it will foster growth, if landing and parking charges for domestic airlines are made free, as a way of cushioning the biting effects of the economy on aviation business.
It is not strange to do this as the model exists elsewhere. We are quick and good to look at enviable standards around us or elsewhere. We have to match our thoughts with actions if we truly want to evolve the sector.
We have been roundly accused as a nation that tends to shy away from the cancer eating it and end up blaming God for our inaction.
It is commendable that our aviation industry now thrives on Internally Generated Revenue (IGR) as recommended by Government. But there is now a glaring error of judgement which needs urgent revisiting. We now know that a huge number, more than the relevant, are being funded from proceeds of surcharges and taxes from the airlines. Some say more than 70 percent of the aviation agencies’ workforce are irrelevant to the operations of the airlines. The argument is that, airlines will fare better with less of the surcharges which are just to take care of recurrent and staff bills they do not need. Government should reverse or review the situation urgently.
While not campaigning for sack or retrenchment, it is also ipso facto justified that only the technical staff of these agencies that are providing direct services for the airlines should be factored into revenue generated from the airlines. It should not be difficult to notice fairness in a country that prays like Nigeria; we hope to see fairness this time.
We should identify those whose services are linked to airlines and pay them reasonable salary, while Government should pick up the payment of salaries of the Administrative staff and such like, that are not providing technical service to airlines.”