Airlines slash fares, yet to benefit from waiver regime

| January 13, 2013 | 0 Comments

THE dream of many air travellers for lower airfares may have come true, as airlines are now cutting fares occasioned by serious competition in the sector.

Meanwhile, three months after President Goodluck Jonathan directed the removal of import duty waiver on aircraft and spare parts, airlines are yet to benefit from the initiative following the failure of the Ministry of Finance and Nigeria Customs Service (NSC) to implement the directive.

For instance, airfare for an hour flight from Lagos to Abuja, Port Harcourt and Kaduna, have been reduced from between N28, 000 and N35, 000 to between N18, 000 and N21, 000.

Medview, which recently acquired a B737-800, puts its fares to Abuja and Port Harcourt at between N18, 000 and N21, 000. Dana has equally reduced its fares and has been recording high patronage since resumption of flights two weeks ago.

The decision of the carriers to reduce fares is not unconnected with the debut of new players in the airline business, which has widened passengers’ choice of carriers.

Operators are now strategising on how to woo travellers with many incentives and the emphasis now is on acquisition of new aircraft. Managing Director of IRS Airlines, Yemi Dada, explained that the laws of demand and supply have come to the front burner, adding that airlines would struggle for more available seats.

Before now, travellers experienced horrendous situations at many of the nation’s airports. Flight delays, cancellations without apology, coupled with discourteous airline workers were the order of the day.

The non-implementation of the waiver regime has adversely affected the importation of airplanes and spare parts, as operators are hampered in their bid to re-fleet with younger and modern aircraft to boost their operations. Not a few believe that the waiver was a new development that would bring “speedy” development to the aviation sector.

The Air Marshall Paul Dike (rtd) committee, set up by former President Olusegun Obasanjo to help tackle the decay in the aviation sector after the Bellview and Sosoliso Airlines crashes in 2005, had in its report recommended the cancellation of the percentage of tax being charged on spare parts in order to assist commercial airline operators improve their business in the country.

The Assistant Secretary General of Airline Operators of Nigeria (AON), Mohammed Tukur, said the directive should be gazetted in order for the Nigeria Customs Service to implement it.

“Any aircraft and spare part coming to the country should be on zero VAT and that was something that should have been sorted out years back and which was never done,” Tukur said.

“Now that it has been pronounced by the President, it is not useful until it has been gazetted and the Customs see a white paper to tell them that they can deal with it.”

Culled from :Here

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