Indigenous carriers in Nigeria will save as much as N26.5billion annually from waiver on tariffs for the importation of aircraft and parts, which take large chunks of operators’ revenues.
As the practice, airlines pay duties on aircraft importation, aircraft spares, engines and other accessories and each airline imports spares many times a year.
The Nigeria Customs Service, NCS, charges five per cent duty on the total cost of every aircraft spare imported into the country and the price of average engine of Boeing 737, which is the commonly used aircraft type among Nigerian airlines, ranges from $500,000 to $1million or more depending on engine life and capacity.
According to an operator, main tyre today costs about $4000 and every week airlines change the tyres of their aircraft, depending on the number of landings. The waiver has saved the airlines the duty hitherto paid on the importation of these parts.
Although duty waiver for airlines has been off and on in the past 10 years, the Customs recently issued a statement confirming the waiver of duties for domestic airlines.
An official of one of the airlines said this would help the operators to save money, which would be channelled to other areas of their businesses.
“This means the era of Customs holding on to airlines has become a thing of the past. One of the gains is downtime operation because an airline can import an engine and within a day clear it and on the second day mount it on the aircraft and start operation. But to make this work quicker, every airline should have liaison officer that can facilitate clearing with Customs,” the official said.
The Executive Chairman of Airline Operators of Nigeria (AON), Captain Nogie Meggison, who commended the federal government and the Minister of State for Aviation, Senator Hadi Sirika for making this possible, stated that the clarification on the Zero Duty and VAT was contained in a letter dated June 20, 2016 and signed by the Nigeria Customs Service.
