Airline Operators of Nigeria (AON) has reacted to the claim that its members are indebted to the Nigeria Civil Aviation Authority (NCAA) for services the agency rendered.
The association said in a statement in Lagos on Monday that all services rendered by NCAA to domestic airline operators were fully paid for in advance on a cash-before-service basis.
AON also said that NCAA issued invoices for all regulatory services it provided, including validation of crew operating licences, aircraft inspections and documentation renewals.
It emphasised that airline operators were required to settle such charges in advance, saying that compliance had been strict.
“In practice, no domestic airline in Nigeria receives NCAA regulatory services without first making full payments.
“This long-standing policy and procedure remains firmly in place.
“Consequently, suggestions that domestic airline operators are indebted to the NCAA for regulatory services are factually inaccurate.
“What the NCAA refers to as ‘outstanding charges’ relates solely to the five per cent Ticket Sales Charge (TSC), a tax imposed by NCAA on passengers for no services rendered to passengers,” it said.
The association said that the tax was not in consonance with the dictates of international aviation.
“This is entirely different from regulatory service fees,” it said.
The AON also said that several airlines maintained dedicated accounts from which the NCAA drew monthly remittances until the forced majure caused by the Iran/Isreal/U.S. conflict that affected global aviation.
According to AON, the operators have appealed to the Federal Government through the office of Minister of Aviation and Aerospace Development to temporarily suspend payment of all statutory charges.
It said the suspension was to assist airline operators in managing cash flows during the period of severe financial stress caused by increased cost of Jet A1 (aviation fuel).
It said that President Bola Tinubu had granted 30 per cent concession, adding that AON was waiting for the Federal Government’s decision on other aspects of the association’s request for intervention.
It called on the Federal Government to amend the Civil Aviation Act to empower NCAA to collect appropriate charges directly from passengers without routing such through domestic airlines, with effect from June.
“This will relieve domestic airlines of the financial burden of acting as collection agents for the NCAA, since airlines currently bear banking transfer charges and other transaction costs in the process of transmitting funds to the NCAA.
“The five per cent Ticket Service Charge in question was introduced over 50 years ago under the Government of General Gowon by the then Federal Civil Aviation Authority (FCAA).
“Its continued relevance has not been reviewed ever since.”
It said that FCAA had evolved overtime to several agencies such as NCAA, Nigerian Airports Authority, which later evolved to Federal Airports Authority of Nigeria and the Nigerian Airspace Management Authority.
“With the creation of each of these agencies, separate taxes, fees, charges and levies were introduced for the Nigerian airline operators to cover their respective services.
“Meanwhile, the five per cent TSC, which was originally a policy instrument was surreptitiously introduced into the legislation by the NCAA, despite vehement opposition from the AON and other industry stakeholders.
“Domestic airlines, in addition to this five per cent TSC, still pay separately and directly for services provided by the various agencies, including the NCAA.”
The association called on the Federal Government to review all forms of levies imposed on domestic airline operators.
“The financial impact of these taxes, fees, charges and levies is adverse and burdensome especially at this period, when the entire world has been exposed to the exogenous shocks of the Iran/Israel/USA crisis.
“The aviation sector is crucial to the economy as a catalyst and enabler for economic growth.
“The survival of the sector therefore demands urgent and deliberate policy action”, AON said.
