Airlines owe NCAA, FAAN N42bn, $7.8m
…As NCAA threatens to withdraw certificates of defaulting airlines
…Quit operation if you can’t meet up financial obligation — Ojikutu tells Operators
By Seun Ibiyemi and Ariemu Ogaga
Airlines Operators are owing the Nigerian Civil Aviation Authority (NCAA), Federal Airports Authority of Nigeria (FAAN), Nigerian Airspace Management Agency (NAMA) over N42 billion and $7.8 million on the statutory 5 per cent Ticket Sales Charge and Cargo Sales Charge (TSC/CSC), the Director-General, NCAA Capt. Musa Nuhu disclosed this to journalists.
Airlines owe Nigerian Civil Aviation Authority (NCAA) over N19 billion and $7.8, Federal Airports and the Nigerian Airspace Management Agency (NAMA) about N18 billion and N5 billion respectively, amounting to a total debt of N42bn and $7.8 million.
The airlines owe FAAN landing and parking charges, while they are also hugely indebted to NAMA for terminal and navigational charges.
Recall that the NCAA said it was carrying out economic and financial audits of the remaining eight domestic airlines in the country.
The airlines are Air Peace, Arik Air, Max Air, Green Africa, United Nigeria, Overland, Azman Air and Ibom Air.
The Director-General, NCAA Capt. Musa Nuhu, in a stakeholder meeting held with indigenous airlines and ground handling companies in Abuja on Tuesday, warned that if the debts owed the agencies were not paid back immediately, the aviation organisations may collapse very soon.
Nuhu also gave the operators one month ultimatum to sign a Memorandum of Understanding (MoU) with NCAA, which would stipulate the repayment plans of their debts to the agency.
Nuhu expressed disappointment over a letter, which emanated from the Airline Operators of Nigeria (AON), signed by Alhaji Abdulmunaf Yunusa, the President of AON, dated August 8, 2022 and addressed to Sen. Hadi Sirika, the Minister of Aviation that accused the agencies, especially the NCAA of muscling out the operators through multiple charges.
Nuhu who noted that the airlines and the entire aviation industry were going through a very difficult period, especially at this time, insisted that all the charges collected by NCAA were statutory and in compliance with the Civil Aviation Act 2006.
According to him, the airlines were not responsible for the payment of TSC/CSC, but only collected such on behalf of the agencies from the passengers and wondered why the operators would accuse it of engaging in multiple levies.
Nuhu further debunked the claim that the NCAA imposed excess baggage charge on the airlines.
He further compared and juxtaposed the levies imposed on operators in Nigeria and Ghana, and reeled out the huge differences.
The NCAA boss explained that for any of the charges to be repealed, it would have to go through the National Assembly and must be assented to by the President of the Federal Republic of Nigeria.
He also said out of the 5 per cent TSC/CSC, the agencies still remit 25 per cent of their revenues to the Consolidated Revenue Account created by the Federal Government and advised the operators to always cross check their facts before going to the public.
He added, “NCAA relies 100 per cent on its Internally Generated Revenue (IGR). The 5 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 refused 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 defunct 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.”
Also, Engr. Mathew Pwajok, the Acting Managing Director of NAMA, reiterated that the charges of the agency were minimal when compared to other countries around the world.
He, however, disclosed that the airlines owed them over N5 billion for services rendered to them over the years.
Also, Capt. Rabiu Yadudu of FAAN, also disclosed that the airlines owe the agency N18 billion and debunked the claim that it charges the airlines indiscriminately as claimed in its letter.
He declared that FAAN was not imposing any new burden on the airlines, stressing that its landing and parking charges for international operators were last reviewed in 1998, while for the local airlines, it was reviewed last in 2002.
He said that there was the need for the charges to be reviewed by the agency, stressing that within the period, the airlines had reviewed their air tickets on numerous occasions.
Responding, Alhaji Kashim Bukar, the Managing Director, Skyjet Airline, wondered why the DG NCAA brought the issue to the public glare.
He said that rather than make it a public issue, NCAA should have called the operators into a closed door meeting to discuss the issue.
Also, Capt. Edward Boyo, the Managing Director, Overland Airways and a trustee of AON, apologized to the NCAA for the letter.
“I’m a trustee member of AON. On behalf of AON, I hope to apologise to you in 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.
Besides, Mr. Allen Onyema, the Vice President, AON, said he was seeing the letter for the first time and expressed disappointment with some of the contents in it.
He regretted that there are factions in AON, which had prevented them from speaking with one voice.
Onyema agreed that he was at the meeting with the Ministry of Finance and Aviation where the issue of skyrocketing price of Jet A1 was discussed, but insisted that no one maligned the image of NCAA or any aviation agencies at the meeting.
Meanwhile speaking with our correspondent about the development on Tuesday, an Aviation Expert and Group Captain (Rtd), John Ojikutu, said airline operators should quit if they cannot meet up with financial obligations.
He blamed the NCAA for not properly regulating the Nigeria aviation industry.
According to him, “When was the last time the NCAA conducted a financial audit on the errant airlines? Airlines are expected to submit their Financial Balance sheets to the NCAA annually so as to ensure that they are financially viable and healthy.
“Such neglects have caused the ‘death’ of some airlines. NCAA is doing the necessary and if the kitchen is getting too hot for some airlines, they should pack and go.
“There is no better way now for the government to handle the matter of airlines debts than to enforce the compliance to the Nig CARs Part 18.17.1.1 on all the operators including the government operators too.
“Any operators that cannot meet the necessary standards should be sanctioned or it takes a walk to the Rice Farm.
“Government is indebted to local and external creditors in quantum; citizens are stealing 400,000 crude oil daily ($40m daily) or $12bn stolen annually; we owe the foreign airlines over $400m.
“Government has tried more than thrice to help the airlines through various intervention funds and reductions in debts and concessions in some taxes yet their debts keep piling up.
“There are no other private enterprises in Nigeria today that enjoy the many financial concessions as the private airlines are enjoying.
“At the present estimates, the Nigeria Commercial Aviation Earnings will drop below 50% of the normal earnings this year and years to come except the BASA is reviewed and the Commercial Agreements are reverted or renewed,” he said.
