Domestic airlines petition minister over new importation policy
By Wole Shadare
DOMESTIC airline operators have drawn the attention of the Federal Government to two areas in their business through which they are losing substantial sum of money.
To stem a major drain on their finances, the operators have petitioned the Minister of Finance, Dr. Ngozi Okonjo-Iweala, seeking her help over the new importation policy of Clean Report of Inspection (CRI), which was recently introduced by the Federal Government on the importation of aircraft spare parts.
They also want the government to rescue their business from bird strikes to which they lost N1 billion in 2003.
CRI is a report that specifies the details of goods to be imported and a government agent must inspect the goods at the point of origin before a CRI is issued on it.
This is usually done to avoid false declaration of goods and its attendant loss of revenue by government.
However, the operators are asking the government to drop the policy because of the bureaucratic process involved in the issuance of a report after inspection, which often last for an upward of six weeks.
This time lag, the airlines noted, would result in loss of revenue, if the government fails to rescind its decision.
In the petition dated July 28, 2004, the airlines under the aegis of Airline Operators of Nigeria (AON) said that the need for urgent maintenance made the destination inspection a better option.
"Importation of aircraft spare parts for maintenance purposes or sometimes on Aircraft on Ground (AOG) situation in which spare parts have to be received within 48 hours to avoid prolonged grounding of aircraft is ideal.
When aircraft spare parts ars subjected to restriction, such aircraft could be on ground for an upward of 14 days. This is the situation currently facing some airlines," the operators stated.
The airline operators further stated: "In the past, waivers were given to airlines to accommodate destination inspection, but lately, we were informed that we could no longer enjoy such privilege, a situation which would ground most airlines. It is a known fact in airline operations, one cannot buy every spare part ahead of schedule, otherwise, if that happens such an airline would be flying a load of spare parts."
They airline operators also want the government to grant them waiver on import duty. For many years, the airlines had enjoyed duty free importation of spare parts, but the new regulations have imposed a duty of 2.5 percent on spare parts.
Though the airlines have complied with the new policy, most of the operators believe that the timing was wrong because of the multiple taxes and levies, low passenger traffic, high price of aviation fuel, all of which account for about 50 percent of their operating cost.
These and many other challenges in the industry had forced the airlines to review the air fare by N1,000 for an hour flight about fortnight ago. They argued that the marginal increase was effected so that they could meet their operational expenses only.
On bird strikes, the airlines said these had impacted negatively on their finances due to the high cost of repairing the damaged engines and other ancillary cost. Bird strikes occur when birds find their way into the engine of an aircraft. Such an engine is usually damaged in the process.
They claimed that with an average cost of about N100 million for the repair of an engine, an airline might have lost about N1 billion. The repair costs, according to operators include engine repairs, purchase of blades clearing charges, expenses for ferrying the affected aircraft and cost of grounded operations.
The Operations Manager for Chanchangi Airlines, Alhaji Muhammed Tukur told The Guardian that bird strikes were perennial. He urged the Federal Airports Authority of Nigeria (FAAN) to find a lasting solution to them, "because the effect is very risky to human lives." FAAN, he advised, should use chemical on the birds to reduce their menace at the nation's airports.
His words: "I once had a bad experience when a bird hit the wind-screen of the aircraft I was travelling in, and blood splashed on the aircraft's rear window. You can imagine if it hit the engine."
He lamented that it cost N16 million to replace an engine of BACI-11, not to talk of Boeing 727.
