FG mulls subsidy for airlines from Feb. 2024, to suspend 5% TSC deductions

Federal Government is said to be mulling the introduction of subsidy regime for domestic airlines barely six months after scrapping the policy on imported petroleum products in the country.

The development follows Wednesday’s decision by President Bola Tinubu to slash fares on public transport by as much as 50 per cent, especially on train services across the country for this yuletide season.

According to sources, the Federal Government plans to exempt domestic carriers from the controversial 5 per cent Ticket Sales Charge (TSC) collected by the Nigerian Civil Aviation Authority (NCAA) from airlines.

To this end, the Minister of Aviation and Aerospace Development, Mr Festus Keyamo is said to have finalized modalities for the implementation of the new policy during a meeting with the leadership of the Airline Operators of Nigeria (AON), last Friday, December 15.

The new subsidy regime when fully implemented seeks to reduce the cost of flight tickets on domestic routes by as much as 50 per cent across all board.

Those present at the meeting included the President of AON, Dr Abdulmunaf Yunusa Sarina, his executive members, and other airline operators.

During the meeting, it was discussed that passengers travelling would be given a form to fill out by the airline they are flying.

The airlines will then forward the completed forms to the Central Bank of Nigeria (CBN) and a 50 per cent refund of the ticket’s value after deducting taxes and charges, specifically the 5 per cent Ticket Sales Charge (TSC) collected by the Nigerian Civil Aviation Authority (NCAA) on behalf of certain agencies.

It was revealed that work has begun to achieve it, and the actual implementation will commence in February after finalising the details.

Air fares from Lagos to Abuja have topped N100,000, while costs to cities for routes like Owerri, Enugu, Anambra, Port Harcourt, Calabar, Uyo, Asaba and Benin have reached as high as N160, 000 and N200,000 for an economy seat on the less than one-hour flight.

Meanwhile, President Tinubu has announced 50 percent reduction in the cost of public transportation specifically on luxurious buses and inter-state travel along 22 routes across Nigeria.

The President has also granted 100 percent free rail train trips across Kaduna -Abuja, Lagos-Ibadan, Warri-Itakpe routes.

Briefing State House Correspondents on Wednesday at the Council Chamber, the Chairman, Inter-Ministerial Committee on Presidential Intervention, Dr. Dele Alake alongside the Minister of Information and National Orientation, Mohammed Idris, said the President in demonstration of his love for Nigerians, approved that the Federal Government intervenes to bring down the cost of public transportation.

Alake said this is to allow Nigerians who intend to travel for the yuletide season visit their loved ones.

He further stated that it is in recognition of the economic situation of the country that the President granted the waiver to reduce the cost of interstate public transportation for travelers.

“In the spirit of Christmas and the end of year festivities, President Bola Tinubu, in another demonstration of his love for Nigerians, has approved that the Federal Government should intervene to bring down the cost of public transportation to allow our compatriots who want to travel to visit their loved ones and hometowns to do so without stress and the extra burden imposed by the high cost of transport around this period.

“The President is well aware of the recent increase in cost of inter-state transportation and even for air travel. Traditionally, our people love to travel during Christmas and end of year to be with families and friends and this has been the practice for ages.

“The Chairman of the Committee added that the special discount granted by the President will begin December 21st and January 4th.

“It is in this wise that the Federal Government is announcing, beginning from tomorrow, a special discounted holiday season fare on road transport and zero-fare by rail across Nigeria.

“What this means is that from tomorrow, Nigerians willing to travel can board public transport via minibuses, luxury buses at 50% discount of current cost and all our train services on the routes the trains currently serve at zero cost to and fro on their travels this holiday season.

“This special presidential intervention will commence tomorrow Thursday, December 21. It will end on January 4, 2024.

Alake further revealed that the Federal Government through the Ministry of Transportation will be working with transporters, road transport unions, Nigerian Railway Corporation to seamlessly deliver on the special presidential initiative.

 “From tomorrow, Nigerians wishing to embark on inter-state travel to any part of the country from Abuja, Lagos, Kano, Kaduna, Enugu, Port Harcourt, Owerri, Ibadan, Akure, Maiduguri, Sokoto and other major inter-state transportation hubs will be able to do so at half the cost,” Dr Alake added.

Speaking on reasons for engaging luxurious Bus Unions, the Minister of State for Transport, Sa’idu Alkali stated that the government partnered with transport companies operating these formats following their well organised structures across the country.

“Why we decided to use luxury buses union is because they are more organised and more structured. So, we held a meeting with the president of the union and they gave us an idea on how much they charge on a normal day but during festive when the buses travel, they return empty and it is on that account that they have to increase the fare during festivities. That has been taken into account. We held several meetings with Mr. President.

“And why we decided to have 50 percent for the land transport, you see when you have this kind of initiative or programme to implement, you have to be mindful of the security situation. If you say it’s for free, even those that did not intend to travel will just go to the park and say I want to travel. But with this 50%, they have the ticketing system.

“So, for those who intend to travel, the federal government will provide 50 percent for them. They do one trip daily, we are going to maintain that,” the minister added.