Renewed war over charges threatens aviation sector

There is uneasy calm in the aviation sector over the renewed war between the airline operators and the regulatory authority, the Nigeria Civil Aviation Authority (NCAA) following the latter’s call on the former to key into the automation system for the remittance of the five per cent ticket sale charge and cargo sale charge (TSC/CSC).

There has been a running battle between the operators and the NCAA over the TSC/CSC which has threatened the stability of the industry. From years immemorial, the war has raged. It has been ultimatum upon ultimatum but the discordant tunes continue while the NCAA has continued to accuse the operators of withholding the money meant to be held in trust.

Presently airlines are said to owe the NCAA N15bn in TSC/CSC with Arik alone owing over N9bn of the sum, according to NCAA document.

Following the unending battle, the NCAA introduced the automation platform which according to it, “offers real-time transparent transactions and removes endless reconciliation of data and reduces high debt profile of Airlines to NCAA”. Following the introduction of the automation, it gave airlines 60 days to reconcile all outstanding debts.

The TSC/CSC is a five per cent of air fare made from passengers and cargo by airlines and as provided in the NCAA Act of 2006. The money is shared by aviation agencies including the NCAA which takes 58 per cent; Nigerian Airspace Management Agency (NAMA), 23 per cent; Nigerian Meteorological Agency (NIMET) - 9 per cent; Nigerian College of Aviation Technology - 7 per cent and Accident Investigation Bureau (AIB) - 3% as contained in Part 12 (1) of the Act which states inter alia: “There shall continue to be a 5% air ticket contract, charter and cargo sales charge to be collected by the airlines and paid over to the Authority”.

All the operators were earlier directed to key into the automation latest by January 2017 but the deadline was shifted till March 31st which elapsed on Friday last week prompting the NCAA to remind the operators and warn them on the consequence of flouting the law.

General Manager, Public Affairs of NCAA, Mr. Sam Adurogboye, NCAA noted that with the expiration of this final warning, it is expected that all airlines that are yet to adhere to the automation and remit collected revenue to NCAA should comply forthwith. The agency further warned that failure to comply will be viewed seriously as the Authority will be forced to invoke the necessary provisions of the law against defaulting airlines.

“The 5% Ticket Sales Charge/Cargo Sales Charge, an Internally Generated Revenue[IGR] to NCAA and other Agencies as enshrined in the Civil Aviation Act 2006 is not a TAX or LEVY on the airlines, but a charge paid by passengers for services rendered towards the development of Aviation Industry in Nigeria”, Adurogboye added.

But the Airline Operators of Nigeria (AON) through its chairman, Capt. Nogie Meggison has called for the suspension of the automation until the parameters “that constitute the 5% Ticket and Cargo Sales Charge are clearly and properly defined”.

Meggison said the NCAA had failed to carry out periodic review of the 5% charges as provided in the law, saying the demand of the operators is for NCAA to clarify on what they are doing with the money to avoid multiple taxes.

He said, “AON also has issues with the immediate mandatory automation without first addressing the cost of integration while sadly at the same time not asking the foreign carriers operating in Nigeria to join the same Automation platform and are charged on their base fares.

But aviation analyst and Secretary of Aviation Roundtable (ART), Group Capt. John Ojikutu, rtd, faulted the airlines’ claim, saying the 5% charge is provided in the NCAA Act, asking, “Are they saying that the Act should be jettisoned”. Ojikutu also blamed the NCAA for failing to act on time until the issue degenerated, noting that the failure of the airlines in remitting the 5 % charge is affecting smooth operations of the agencies.

Ojikutu, Secretary of Aviation Roundtable stressed that regulations on ticket sale “are national that cannot be unilaterally suspended”.

Also in his view, Secretary General of Association of Nigerian Aviation Professionals (ANAP), Comrade Abdulrazaq Saidu said “This money they (airline operators) are owing is stealing by trick of public funds, air travelers pay that 5%, that money has never been a tax to any airline as some of them will erroneously lead people to believe.