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 depends only on its internally generated revenue (IGR). The 5% TSC paid by customers’ accounts for 85% of NCAA revenue, with the remaining 15% coming from airlines as cost-recovery payments for services rendered. We don’t charge airlines for overage baggage either. Where did the operators see this, I wonder.
“Despite having received payment from the passengers, the airlines have purposefully refused to pay the amounts owed to us. The airlines rake in cash but won’t transfer it to the proper authorities.
“AON requests that we offer them our services without charge. The NCAA is being attempted to be defunded by the airlines. We’ve been owed money, but you won’t give it to us. In reality, we are subsidizing the airlines with the fees we are charging them, according to Nuhu.
NAMA’s interim managing director, Mathew Pwajok, reaffirmed that the organization’s fees were insignificant in comparison to those of other nations.
The airlines, according to Pwajok, owe more than N5 billion for services provided to them 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 reviewed in 2002. He claimed 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 am an AON trustee member. I desire to apologize to you for the letter on behalf of AON. It wasn’t the letter’s intent for this to happen. The letter contained several questionable passages. We apologize, and I humbly request your indulgence in putting the matter to rest,” he stated.
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.