Nigeria’s Airlines Contest Claims of Unpaid Regulatory Fees
The Airlines of Nigeria (AON) has refuted assertions that the national airline owes outstanding fees to the Nigerian Civil Aviation Authority (NCAA) for regulatory services. The association emphasized that domestic airlines prepay for all necessary regulatory services and accused the NCAA of creating a misleading narrative regarding airlines’ financial responsibilities.
FAA Directive and Industry Concerns
This contention arises in the wake of a recent directive from the NCAA, which mandated that 11 domestic airlines adhere to a “no pay, no service” policy concerning alleged unpaid statutory transfers. PREMIUM TIMES previously reported an internal memo, dated May 22 and signed by the NCAA’s Director of Finance and Accounting, Olufemi Odukoya, instructing all departments and regional offices to suspend services to affected airlines pending financial clearance from the Accountant General.
Airlines Facing Suspension
The airlines impacted by this measure include Air Peace, Ibom Air, Arik Air, United Nigerian Airlines, Max Air, Rano Air, NG Eagle, ValueJet, Overland Airways, Umza Air, and Caberton Helicopters. The initial suspension raised alarm within the aviation industry about possible disruptions to airline operations, especially as domestic carriers are already struggling with soaring Jet A1 aviation fuel prices and currency fluctuations.
Regulator’s Response to Stakeholder Concerns
However, a mere two days later, the NCAA retracted the directive following consultations with stakeholders who raised concerns about the repercussions of rising operational costs on airline functions. The NCAA clarified that the suspension did not negate any outstanding debts owed by the airlines.
AON’s Denial and Clarification
In a statement released on Monday, AON asserted that all payments for NCAA-regulated services are settled in advance. The association stressed that recent media reports misrepresented the relationship between member airlines and the regulator. “Nigerian airlines wish to set the record straight in response to recent media publications that portrayed member airlines as being beholden to the regulator for services provided to operating carriers,” AON noted. The association highlighted that services like aircraft inspections and crew license verifications are only rendered after full payment is made.
Issues with Ticket Sales Charge
AON clarified that the primary issue revolves around the 5% Ticket Sales Charge (TSC) collected from passengers on behalf of the NCAA. This charge, not a payment for services rendered to airlines, is effectively a tax on travelers. The association pointed out that airlines had previously managed dedicated accounts for remitting fares but face increased operational challenges due to rising costs and economic pressures.
Calls for Legislative Reform
The association previously appealed to the federal government through the Aviation and Aerospace Development Minister, Festus Keyamo, for a temporary waiver on certain statutory fees. Reports indicated that President Bola Tinubu approved a 30% concession while discussions on further relief measures continue. Furthermore, AON urged the federal government to amend the Civil Aviation Act, enabling the NCAA to collect fees directly from passengers instead of through airlines. This shift would alleviate some of the financial strain, as airlines currently bear additional banking and transaction costs. The association cautioned that ongoing fiscal challenges, such as multiple taxes and soaring Jet A1 aviation fuel prices, are exacerbating the already delicate financial landscape for domestic airlines.
