Operators seek tax holiday, subsidy to save airlines

Worried by the fate that awaits local carriers, operators yesterday, appealed to the Federal Government to introduce some economic recovery measures to safeguard airlines from collapse.
  
The operators, currently burdened by recurrent costs, are seeking aviation intervention fund at an interest rate of not more than five per cent. They suggested that government could take a cue from the American model of offering 50 per cent funding and grants, and 50 per cent palliatives through waivers and suspension of taxes, levies and fees among others.
   
Besides, they called for the implementation of President Muhammadu Buhari’s Executive Order on Removal of Value Added Tax (VAT) from all forms of transportation; as domestic airlines are still the only forms of transportation paying VAT.
  
The current restriction of both local and foreign commercial flight services has forced domestic carriers into financial distress estimated to hit N360billion losses. The sum, spread across eight airlines, is the running cost of operation, which include aircraft leasing, routine maintenance, debt servicing, staff salaries and allowances, parking and maintenance fees, and recurrent training, amid nil revenue.

The International Air Transport Association (IATA), recently announced that on a global basis, an estimated emergency aid of up to $200billion is required for airlines to recover from the impact of the virus.
  
IATA estimated that the disruption could cost over 853,000 losses in passenger volumes and $170million in taxable base revenues. And should the situation persist, loss of passenger volumes could rise to over 22 million with a consequent loss amounting to about $1billion in revenue.