Iata hits out at ‘illegal’ taxes facing African airlines

In an industry battling globally for survival, African airlines are facing even greater challenges, Tony Tyler, CEO of the International Air Transport Association (Iata), said in Cape Town recently. “Fuel costs, taxes and infrastructure charges play a big role in the African context,” he said. “On average fuel uplift in Africa is 21% more expensive than in other parts of the world. That is a huge cost burden. On average fuel is about a third of an airline’s cost structure. In Africa fuel accounts for 44% of costs.” He said much of the problem was caused by government policies in Africa that tended to see aviation as an “elite product rather than a critical component of the continent’s economic infrastructure”. Tyler said as a result aviation remained heavily taxed in Africa even though this was often in violation of international principles that prohibit the taxation of jet fuel for international operations. “We are campaigning across Africa for governments to review the situation. We have had some success in Angola, Uganda and Ghana, but there is a lot more work to be done.” While aviation in general faces high levels of taxation globally, Tyler said it had become a soft target in Africa. “Our biggest task is to explain to governments that making connectivity more expensive comes with a big economic cost,” he said. “And of course then there is the matter of infrastructure. Airlines pay for their infrastructure. Iata is involved in helping to ensure that the charges are fair, transparent and related to cost.” Referring to the difficult discussions between Iata and the Airports Company South Africa (Acsa) several years ago when airlines faced huge increases from Acsa that were eventually allowed by the regulator, Tyler said it proved that more transparency in the process was required while at the same time airlines and infrastructure providers needed to work together in partnership. “It also went a long way in proving the need for governments to have clear regulatory structures to ensure that infrastructure investments delivered the greatest benefit.”