Nigeria faces connectivity loss if aviation costs persist, IATA warns

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By Dickson Omobola

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The International Air Transport Association, IATA, has raised concerns over Nigeria’s infrastructure and operating costs, saying the country risked losing aviation connectivity if the challenges persisted.

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Director-General of IATA, Willie Walsh, said despite the country’s population and wealth, the high cost of doing business and uncertainty within the operating environment had made the market less attractive to investors.

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Addressing newsmen at the 82nd Annual General Meeting and World Air Transport Summit, WATS, in Rio de Janeiro, Brazil, Walsh said airlines were unlikely to invest in Nigeria when other markets offered more favourable conditions and potentially easier returns.

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His words: “Well, Nigeria should be a powerful aviation market, given the population and the underlying wealth of the country, there is no reason why it should not.

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“The problem there is, the infrastructure has not developed at the pace it should have. However, it is principally down to the cost of operating in Nigeria, and the uncertainty that brings into the market.

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“So, you are not going to get airlines to invest when they have other alternatives to invest. You never have a guaranteed return, but maybe an easier return.

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‘’I think it is a balance between governments that can count the tax revenue because they can see it, or believe in the economic benefit that they are going to get.

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‘’All we can do is keep pointing to countries like Sweden, where they introduced a tax on aviation and then wondered why their economy was being hit so hard, and then realised, actually, that it had a lot to do with the fact that they lost so much connectivity.”

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‘’In many cases, even though they have removed the tax, they are not going to regain all of the connectivity that they had. So, it is a leap of faith on the part of governments to believe that they will get greater economic benefit overall and they will grow your tax base, rather than rely on the taxation you are getting from airlines.”

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