Industry experts Captain Ado Sanusi and Captain Roland Iyayi decry the detrimental effects of overtaxing airlines, emphasizing the need to draw a line.
Sanusi asserts that taxing operators to fund agencies harms the industry, stating, “You cannot save the industry by imposing more taxes on airlines.”
He emphasizes the industry’s dire state, highlighting the need for balanced taxation for economic growth.
“When you come to an already sick industry, in an ICU and what you are trying to do is see how much blood you can get from that patient who is in ICU that means you’re gonna kill the patient.
“The industry is in crisis, the airlines are struggling, the operators are struggling, the service providers are struggling. Now, you want to solve the problem of the agencies and say let’s tax the airlines’ that are already struggling bearing in mind that without the operators’, agencies will not exist.”
Sanusi added, “There is no government in the world that has taxed themselves to prosperity. it’s not possible because you will kill the business and when you kill the business you kill employment and when you kill employment you kill security. So, there must be a way of balancing taxation for economic growth.
Iyayi echoes the same sentiments, emphasizing the detrimental effects of
overtaxing airlines to their economic well-being. He criticizes government agencies’ focus on revenue generation without improving service quality.
Iyayi noted global airline profitability averages 1.5-2.5% for major carriers with size and scope.
He further criticized Nigerian experts who advise on airline management without industry experience.
Highlighting the burden of taxes, Iyayi reveals that domestic airlines face a total tax exposure of 13.5%, significantly impacting profitability. He questions the logic behind certain policies, such as the 5% ticket sales charge, and its impact on passenger demand.
“Seriously? Who provides the capacity for the passengers? Government or private airlines? He questioned, “Whose loss occurs when seats are flown empty, given that these are perishable? Does an increase in ticket price suppress demand? “Why have ticket prices not been unbundled in this country?” he queried.
In conclusion, both experts advocate reevaluating tax policies to sustain the airline industry and promote economic growth.