Foreign airlines made N842bn in 5yrs - Remitted N670bn in 12 yrs

[DT]

The Senate Committee on Aviation says it has discovered that foreign airlines operating in Nigeria made N842.4 ($5.4bn) in five years and remitted N670.8 ($4.3bn) in 12 years.  

Chairman of the committee, Senator Hope Uzodinma (PDP, Imo West), who presented the report of its investigation into the violation of aviation laws and sharp practices by foreign airlines in Nigeria yesterday said the information from the Central Bank of Nigeria shows a total outward remittance of $4.3bn between 1999 and 2011; while the information from the Nigerian Civil Aviation Authority put the ticket sales between 2006 and 2011 at $5.4bn.  

"This discovery underscores the volume of business of the foreign airlines and implication for the economy and foreign exchange fluctuations causing pressure on the naira. It also underscores the sharp practices involved in how foreign airlines transmit the bulk or rest of the money they make in Nigeria out of Nigeria," he said.

The lawmaker said the British Airlines, Virgin Atlantic and other airlines were found to be exploiting Nigerian consumers "with respect to indiscriminately high and excessive fares and a regional imbalance compared to similar distances and set of market forces."

"The committee finds that discriminatory and excessive pricing in the fares fixed for air travel exists in Nigeria and must be dismantled as advocated by stakeholders", he added.

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The committee recommended, among other things, that the NCAA, the Aviation Ministry, Justice Ministry, EFCC and other relevant agencies work together to prosecute organisations and persons who have violated the nation's aviation laws.

It also recommended that the Aviation Ministry should desist from negotiating commercial agreements with foreign airlines as it lacks the competence to do so.

The Senate, however, asked the committee to go and summarise its findings and recommendations.

A source at the ministry of finance told Daily Trust yesterday that there is no structure in place to compel the airlines to pay any kinds of the revenue to the government.

The source said that foreign airlines operating in the country are supposed to pay certain amounts on each passenger to the government and also certain amounts realized on tickets sold to the government.

"But I am not aware if they are doing such now because there is no structure on ground to monitor that," the source said.

He said while they don't pay as if they are operating in Nigeria, the airlines are required to pay VAT directly to the Federal Inland Revenue Service.

In April, the Senate committee on aviation ordered foreign airlines operating in the country to pay taxes on fuel surcharges.

The committee also directed the airlines to pay five percent of all Passenger Fuel Surcharge S(PFS )to the federal government.

The airlines had admitted that they had not been paying the five per cent as tax on ticket sales to the government. They said that they were not aware of any law classifying the surcharge as revenue.

Daily Trust

[Tina lawrence]

Foreign airlines make more money than Nigerian airlines.We need to learn from them as soon as possible