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Nigeria: As Private Jets Owners Defy Tight Rules
February 13,2014 Thursday  AllAfrica   
This year may present a unique opportunity for jet manufacturers like Cessna, Gulfstream, Dassault and Bombardier, which have spent the last decade trying to build their Africa aviation business, particularly in Nigeria, to expand in one of the world's fastest growing aviation market.

The growing class of super-rich Nigerian business moguls, bankers, preachers, politicians and oil magnates who cannot compromise their comfort and time, now rush to acquire their own aircrafts.

In fact, now that the country is gearing for elections next year, more politicians could join the growing list of jet owners. In the same vein, some other rich celebrities and spiritual leaders are also in the race to belong to the elite league of jet owners in order to effectively oversee their growing flock.

One of the many factors that are encouraging the desire to acquire private jets is, according to analysts, the growing frustration with the kind of services offered by commercial airlines. The services are generally poor, experts argue, making wealthy Nigerians to opt to acquire their own jets to save the time that would, otherwise, have been lost waiting for flights.

Similar reasons, globally, are driving the business for jet manufacturers. For instance, international private jet charter firm Flexjet LLC, last October placed new firm order for 30 Learjet85 aircraft, adding to a previous order of 30, as part of its deal to buy up to 245 Bombardier jets. Probably, the company had considered the bourgeoning Nigerian jet market . Nigerian moguls find the Learjet flexible, as there are a number of them flying our skies.

General aviation, which refers to all flights that are not operated by airlines charter firms or the military, is already a $150 billion business in the United States, according to American aviation sources, whereas the business is now more than N1.3 trillion in Nigeria.

Nigerians, they say, top list of private jet owners in Africa, spending over N1.3 trillion flying their winged beauties. Statistics show that the ownership of the state-of-the-art jets in Nigeria had grown from only 50 in 2008, to over 100 in 2012, and may hit 500 in 2020, going by projections sourced from Nigerian aviation authorities.

Even as the industry awaits the arrival of more high performance jets, turbo props and helicopters to add to the jets in Nigerian skies, there may be a few difficulties at ground zero.

Government, last year, imposed a luxury tax on non-scheduled flights of private jet owners and operators, making it difficult now for high-flying corporate honchos to evade duties on their private jets using whatever loopholes in customs rules, although that rule is now subject to contention between authorities and operators.

A tax of $4, 000 was to be levied on the owners and operators of foreign-registered private jets for every flight departure within Nigeria, while Nigerian-registered private jets have to pay $3,000. The tax has to be paid before each departure. Private jets are for the super-rich, the tax firmly indicates.

Nigeria is making regulations tight which will mean private jet, the ultimate status symbol of the global elite, may become rare as countries like China is opening its skies to private jets.

Recent rules changes indicate that China is preparing to open its skies to private aircraft, in a move that may herald the greatest expansion of business and private aviation in the last 30 years in the country.

Recently, China's aviation regulator simplified flight approval procedures for private aircraft and lowered the threshold for obtaining licenses. Still, in a country where the military controls 80 percent of airspace, there were formidable obstacles to expanding private air travel. Previously, approval for a three-hour trip on a private plane would take, at least two, weeks and was never guaranteed.

What India did was to reduce the timeframe for a foreign registered private aircraft to operate in India from six months to 60 days.

However, Nigerian aviation authorities are worried that it is the number of private jets that are growing at the detriment of the local airlines, because some private jet owners illegally engage their aircraft in charter operations thereby taking away substantial business from scheduled airlines.

They are worried that many private jets are no longer operating their aircraft as private jets, as many of them had turned their planes into "Kabu-kabu"(commercial uses).

But aviation Minister Princess Stella Oduah says private jet owners operating without requisite license will be exposed and penalised. Speaking last month at Daily Trust, Mrs Oduah promised to take decisive action to resolve the contentious issues.

Explaining how operators cut corners, she said: "What happens is that if I have a friend, maybe in India, UK or US and they recognise the fact that there is emerging market within Nigeria and if they bring in their aircraft they will make their money, they do so. So, aircrafts were coming supposedly as private aircraft but they end up here as commercial aircraft"

Those kicking against aviation charges, according to the minister, are those not used to paying their bills. She explained: "The real practice is that Musa will bring in an aircraft supposedly as private, under that definition it means him and his family, but because he knows the opportunity cost of the aircraft staying there is far too much for him, so he wants to ensure that he maximises the benefit. He gives it to Idris here who is probably into charter. Idris will have his aircraft in his fleet and operate it commercially and charge me $17,000 to take me to anywhere that is 45 minutes to one hour flights, but forgets that when that happens, he uses the apron, he uses the services of air navigation, he uses the services of AIB... He uses the NiMET service that tells him the climate situation is XYZ."

However, an industry analyst, Mohammed Tukur, says things can be bettered if authorities are truly sincere about exposing and penalising defaulters.

Sheri Kyari believes it is up to the general aviation department to map out strategies to deal with the activities of illegal private jet operators. He foresees a surge in private jet ownership as election activities gather momentum ahead of the 2015 general elections.

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[Editor:ottor]