Recently, the International Air Transport Association (IATA) published that Nnamdi Azikiwe International Airport (Abuja) was topping the chart of airports with the highest airport charges, followed by Murtala Muhammed International Airport (MMIA) in Lagos.
The IATA have described the high taxes as one factor hampering the growth of the sector in Nigeria.
Kamil Al-Awadhi, Vice President of IATA, made this announcement, at the just concluded Aviation Africa Summit in Abuja, where he also noted that the same issues are faced on other continents such as Europe and Asia.
From the records, Nigerian airports charge foreign airlines 27 levies, which places them among the most expensive in the world, discouraging foreign airlines from flying into the country.
Al-Awadhi said that African airports are experiencing depreciation due to high airport charges. He said that the interest rate of over 25% is also killing the sector as it stops the continent from competing with other airports on other continents that have low airport charges.
In recent research conducted, they discovered that the most expensive airport in Africa is Abuja Airport, followed by Lagos Airport. With all these exorbitant charges, Nigerian airlines can’t compete with their foreign counterparts.
Africa has put itself in a place where it cannot help itself: expensive fuel, excessive charges, leasing and insurance through the roof. The airlines need to be financially viable too. The airlines contribute to the country’s GDP, but Nigeria needs to decide what to do for them to survive.
Al-Awadhi says Africa accounts for 18% of the global population and 2.1% of airport activities. He also said that carriers are expected to generate a moderate combined loss of around $484 million in 2023, even as the continent's actions make it difficult for airlines to operate without heavy charges.
However, despite the challenges, the industry continues to move towards profitability following the COVID disruption and could be in the black as soon as next year.
Underpinning this is the robust demand for air travel. As we saw in the second quarter of 2023 – and for two consecutive quarters–African carriers had one of the world’s highest annual passenger traffic growth rates, second only to Asia Pacific.
With total traffic up 38.9 per cent compared to the same quarter in 2022, African carriers’ growth outperformed the industry-wide average for total and international traffic, even though the region has not fully recovered to pre-pandemic levels. Q2 2023 RPKs were 9.2 percent below the same quarter in 2019. Despite this continued positive performance, the region still confronts economic challenges that severely limit the affordability of air travel, in addition to a range of infrastructure issues that curb capacity and hinder the development of consistent air service.