Yesterday, the crisis affecting local operators changed course when the Nigerian Civil Aviation Authority (NCAA) ordered the airlines to start paying back debts totaling more than N45.29 billion.
Airlines that accrue debts will no longer be accepted, according to the top regulatory authority, which accused the operators of using a systematic scheme to drive away regulators and service suppliers.
Following yesterday’s round-table discussion between the regulator and operators in Abuja, it was discovered that domestic airlines owed the NCAA more than N19 billion and $7.8 million in recent months for the required 5% Ticket Sales Charge and Cargo Sales Charge (TSC/CSC) (N3.29 billion).
The Federal Airports Authority of Nigeria (FAAN) and the Nigerian Airspace Management Agency (NAMA), respectively, owe the airlines N18 billion and N5 billion in debt. The airlines are heavily in debt to NAMA for terminal and navigational fees, as well as FAAN for landing and parking fees.
The Director-General of the NCAA, Capt. Musa Nuhu, issued a warning that the aviation agencies may soon collapse if the debts owing to the agencies were not paid back swiftly in the coming weeks.
Operators were given a month by Nuhu to sign an MoU with NCAA outlining their debt recovery strategies for the organization.
Hadi Sirika, the minister of aviation, had claimed that local airlines owed N22 billion to their regulator and service providers in November 2020.
However, the demand for the debt, which has more than doubled, comes at a time when the airlines are under severe strain due to existential issues with aviation fuel, the FX liquidity crisis, and the ensuing decline in capacity.
Nuhu expressed concern over a letter that came from the Airline Operators of Nigeria (AON) and was signed by Abdulmunaf Yunusa, the organization’s president, and in which the organizations, particularly the NCAA, were accused of bullying the operators by filing several complaints.
The DG claimed that all fees collected by the NCAA were legal and compliant with the Civil Aviation Act 2006, despite acknowledging that the airlines and the overall aviation industry were going through a particularly difficult time.
He claimed that the airlines were only responsible for collecting TSC/CSC from passengers on behalf of the agencies and questioned why the operators would charge the NCAA with imposing numerous levies.
Nuhu further refuted the assertion that the NCAA charges airlines for extra baggage. He examined and emphasized the stark variations between the fees charged to operators in Ghana and Nigeria.
He explained that the parliament would have to work on any charges’ repeal and have the president’s approval.
“NCAA relies on its Internally Generated Revenue (IGR) 100 per cent. The five per cent TSC paid by passengers is 85 per cent of NCAA revenue, while the other 15 per cent comes from airlines as payment for services provided and they are all cost recovery. We don’t also impose any excess baggage charge on the airlines. I wonder where the operators saw this.
“The airlines have intentionally refused to pay the debts owed us despite the fact that they have collected such from the passengers. The airlines collect money and refuse to transmute such to the right authorities.
“AON wants us to provide services for free for them. What the airlines are trying to do is to defund the NCAA. You have refused to give us our legitimate money. The fees we are charging the airlines are just cost recovery and we are actually subsidising the airlines,” Nuhu said.
Mathew Pwajok, the acting managing director of NAMA, reaffirmed that the organization’s fees were insignificant in comparison to those of other nations.
But Pwajok revealed that the airlines owed more than N5 billion for the services they had received over the years.
Additionally, FAAN Capt. Rabiu Yadudu revealed that the airlines owe the organization N18 billion and refuted the assertion made in the agency’s letter that it charges the airlines arbitrarily.
Yadudu emphasized that FAAN’s landing and parking fees for international operators were last reviewed in 1998, while those for local airlines were last evaluated in 2002. He said that FAAN was not placing any new burden on the airlines.
Capt. Edward Boyo, managing director of Overland Airways and a trustee of AON, apologized for the letter to the NCAA.
“I’m a trustee member of AON. On behalf of AON, I hope to apologise to you for the letter. The letter wasn’t intended to have this effect. Some parts of the letter were inappropriate. We apologise and I want to crave your indulgence to drop the issue,” he said.
Allen Onyema, vice president of AON, stated that he was disappointed with parts of the letter’s contents after seeing it for the first time.
In AON, there exist factions, which Onyema regretted because it had hindered them from speaking with a unified voice.
