A chunk of the bloated airfares paid by Nigerians to both local and foreign airlines have been traced to the numerous taxes and surcharges passengers pay to the various parastatals in the aviation industry, new investigations by BusinessDay have revealed.
In addition to the taxes is the fuel surcharge by the airlines which constitute a substantial part of the airfares.
In Nigeria, each passenger pays a $50 passenger service charge to the Federal Airports Authority of Nigeria (FAAN); 5 percent of non-taxable part of ticket to the Nigerian Civil Aviation Authority (NCAA), VAT of 5 percent and $20 security tax. The Nigerian Airspace Management Agency (NAMA) and Nigerian Meteorological Agency (NIMET) get some share of NCAA’s 5 percent.
A passenger flying out of the Kotoka International Airport, Accra, according to airline sources familiar with aviation operations in Ghana, pays a total of $60 as taxes and charges (excluding fuel surcharge), whereas in Nigeria the passenger travelling on a ticket costing $2,464 on Lagos-London-Lagos route pays $316.4.
A breakdown of this $316.4 shows that FAAN takes $50 as passenger service charge; NCAA takes $123.2; VAT takes $123.2, while $20 is for security tax.
For local fares, a ticket from Lagos to Abuja costing a total of N38,800.00, a huge N17,280.00 is paid as taxes and surcharges.
A passenger told reporters that he bought a Virgin Atlantic Airways ticket on the Lagos-London-Lagos route at N533,109. A breakdown indicated an airfare of N389,312 and a huge tax and fuel surcharge of N143,797.
A passenger, who dared to ask why he had to pay so much for his trip, was told by the airlines officials that the taxes demanded by his home country were “too high”.
An aviation analyst who craved anonymity told reporters that the demand on the Nigeria-Europe route outstrips supply.
“Avaialable passenger capacity is far too high compare to the available seat capacity. In a situation like this, it is expected that fares will be high. The government can encourage high seat availability which will drive fares down by encouraging more airlines to operate on the routes or alternatively increase the frequencies of existing airlines”, the source said.
BusinessDay had reported on Thursday that Nigerian passengers had paid a whopping N3.8 billion higher than Ghanaian counterparts since the award winning newspaper broke the story in November last year.
To give teeth to its earlier call on foreign airlines to stop the disparity in fares charge in Nigeria and Ghana on the London route which is almost of equal distance, Aviation minister, Stella Oduah, gave a 30-day ultimatum to all foreign airlines to normalise their fares or risk being banned from operating into and out of Nigeria.
Many passengers had complained that the Federal Government had not fulfilled its promise made to Nigerians in November 2011, when the media broke the story on the huge fare differentials on the Lagos-London-Lagos and Accra-London-Accra routes.
The government had said then that it was in discussions with the airlines to ensure that Nigerians are not made to pay higher fares on equidistant routes.
A group which calls itself the ‘Lagos Airport Forum’ while commenting on the fare differential said: “It shouldn’t be an unknown phenomenon to you that foreign crew don’t exactly get excited whenever they’re scheduled to Nigeria flights, for obvious reasons.
“They may likely be paid much higher allowances due to security and related risks, which ultimately filter down to the ticket price.
“Let’s fix our side of the sector and watch the unprecedented positive effects on the fare prices among other things.
“There are several parameters that are incorporated in determining the fare. But the very fundamental truths in this are the following: vastly improved airport infrastructure and a matching business investment climate; eliminate the extra costs due to security and business risks; the airlines come here but don’t exactly have it easy, due to the poor state and challenging environment in which they have to operate; having the competitive package ourselves”.
An aviation analyst, who did not want his name in print, said that it was unfortunate that the Federal Government was not living up to its billing on the huge fares Nigerians are paying, describing its lukewarm attitude to the issue as “unfortunate”.
The analyst noted that the government which collects such sundry taxes will also find it difficult to ask airlines to reduce fares.