The ongoing row over the sharing formula of a five per cent ticket/cargo sales charge (TSC/CSC) is unsettling the industry. While some stakeholders canvass a review in favour of the Nigerian Airspace Management Agency (NAMA), others want the status quo maintained, OLUSEGUN KOIKI reports.

For almost two decades, a quiet but fundamental issue has remained unresolved in Nigeria’s aviation industry.

There has been a recurring issue about who should receive the larger share of the funds generated from the five per cent TSC/CSC, which is collected from passengers and cargo agents by the airlines and warehoused by the Nigeria Civil Aviation Authority (NCAA).

The TSC/CSC was introduced by the Federal Government as a dedicated aviation funding mechanism to support vital aviation projects after the end of the civil war in 1970.

The matter, which has lingered in the industry for years, has now become a public issue following a proposed amendment to the existing revenue-sharing formula among aviation agencies.

Under the current arrangement of the Nigeria Civil Aviation Act 2022, the five per cent TSC/CSC collected from passengers’ tickets and cargo is distributed among five aviation agencies.

The NCAA receives the largest portion (56 per cent) followed by the Nigerian Airspace Management Agency (NAMA) at 22 per cent, the Nigerian Meteorological Agency (NiMet) at nine per cent, the Nigerian College of Aviation Technology (NCAT) at seven per cent and the Nigerian Safety Investigation Bureau (NSIB) at six per cent.

However, the proposed legislative amendment seeks to reduce the NCAA’s share from 56 per cent to 40 per cent while increasing NAMA’s allocation from 22 per cent to 40 per cent. The proposed legislative amendment is currently at second reading in the National Assembly.

The proposal has, however, triggered intense debate between the two agencies and industry experts who are divided about the move.

The arguments of proponents and antagonists are anchored on aviation safety, infrastructure development, regulatory obligations and the sustainability of the sector.

The Director of Public Affairs and Consumer Protection at the NCAA, Michael Achimugu, in a media briefing in Abuja, warned that any attempt to reduce its statutory share of the five per cent TSC would undermine aviation safety and weaken the authority’s capacity to carry out effective regulatory oversight.

Achimugu argued that the proposal was unnecessary, noting that NAMA was established by law as a self-sustaining agency, while the NCAA depends on the TSC to fund its statutory regulatory responsibilities.

However, the debate has also extended to discussions around the possible commercialisation or privatisation of NAMA.

Earlier, some union leaders suggested the restructuring of NAMA into a commercially-driven organisation to improve its efficiency and reduce dependence on government funding.

For instance, the Joint Action Committee (JAC) of unions advocated the commercialisation or privatisation of NAMA, saying the move was necessary to modernise Nigeria’s air navigation infrastructure, strengthen operational efficiency and enhance aviation safety.

The joint statement was signed by the branch secretaries of the Air Transport Services Senior Staff Association of Nigeria (ATSSSAN), National Association of Aircraft Pilots and Engineers (NAAPE), National Union of Air Transport Employees (NUATE) and the Association of Nigeria Aviation Professionals (ANAP), Obasi Ugwumba, Omaga Joshua and Celestine Chukwu, Salami Adeniyi, respectively.

They argued that NAMA’s current dependence on government funding had slowed the deployment of critical technologies needed to meet global aviation standards.

For NAMA and its supporters, as the provider of air navigation services, the agency carries enormous operational responsibilities that require greater financial support.

The Managing Director of TopBrass Aviation Services Ltd, a private jet company, Roland Iyayi, in an interview with The Guardian, said the existing formula was fundamentally flawed from inception, especially since the deregulation of the airline sub-sector by the Federal Government in 1982.

He explained that what began as a fund for airport infrastructure development across the country gave undue financial advantage to the NCAA at the expense of other important service providers.

Iyayi, who was also a one-time managing director of NAMA, alleged that the five per cent TSC/CSC arrangement was “arbitrarily skewed” in favour of the NCAA by vested interests when the laws establishing the agencies were being developed.

As someone who was involved in the initial discussions surrounding the passage of the NCAA and NAMA Acts of 2006, he claimed, certain individuals hijacked the process just to protect the NCAA.

He queried why an agency primarily responsible for regulation should receive more than half of the TSC revenue while an organisation like NAMA, which provides the air navigation infrastructure upon which every flight depended, received less than a quarter of the total sum.

Iyayi said installation, maintenance and calibration of navigation equipment, provision of communication, surveillance services across airports and airspaces nationwide as some of the services rendered by NAMA.

He noted that besides human capital development, the NCAA does not provide any infrastructure for the industry, stressing that aviation safety was a collective responsibility and could not be achieved by regulation alone.

According to him, while the NCAA plays a vital oversight role, safe operations rely on the availability and reliability of air navigation infrastructure provided by NAMA.

Iyayi said the sharing formula undermined the International Civil Aviation Organisation’s (ICAO) principle of cost recovery, which recommended that aviation charges collected from users should primarily support the services for which they were introduced.

He specifically queried the remittance of portions of the NCAA’s revenues into the consolidated revenue account of the Federal Government.

He recalled: “A few years ago, this same issue was raised by the Senate Committee on Aviation, proposing to readjust the sharing formula, but again some vested interests kicked against it.

“In real terms, the safety argument applies more to the service providers/operators than the regulator. No matter how safe a regulator is, the lack of safe operations by the regulated makes absolute nonsense of the whole safety argument.

“I wonder if anyone has actually taken time to consider how much of the NCAA’s revenue at 25 per cent deduction accrued to the Federal government since 2022, when airlines are groaning and shackled by all manner of taxes and fees.

“In 2023, the NCAA remitted over $500 million to the coffers of the Federal Government. In 2024, another $496.3 million was remitted to the consolidated revenue account. These amounts are pure taxes by the definition of the word, because they are not required.”

Apart from the TSC sharing formula, Iyayi raised concerns over government deductions from aviation agencies’ revenues.

Also, a former Air Force Commandant at the Murtala Muhammed International Airport (MMIA), John Ojikutu, pointed out that the current allocation did not reflect the operational burden carried by NAMA.

Ojikutu, like Iyayi, questioned the criteria used to arrive at a situation where NCAA receives 56 per cent while NAMA receives about 22 per cent despite the fact that many of the charges collected from airlines originate from NAMA’s core activities.

Ojikutu emphasised further that NAMA had a larger workforce that covers the whole country, while the NCAA operates mainly through regional offices with fewer staff.

He argued that NAMA invests heavily in equipment acquisition, maintenance, calibration and power supply to ensure continuous air navigation services.

According to him, the agency’s financial challenges had direct implications for aviation safety.

Ojikutu said: “NAMA buys and places equipment across the country’s airports and maintains them periodically and calibrates this equipment in compliance with ICAO standards and recommended practices.

“Provisions of power to all these facilities across the country’s airports is mandatory for continuous sustenance of their operations despite the high cost of diesel. In some airports and compulsory reporting points, NAMA operates 24/7 without blinking. In critical areas, it provides solar power to complement the primary and secondary power supply.

“NAMA train air traffic controllers, air traffic engineers, and other professionals. Technology is dynamic and NAMA must at all times respond to technological changes; otherwise, Nigeria will be cut off from the global village.

“A major responsibility of the NCAA as the watchdog of safety is the training of its personnel, most of whom are already professionals from the public agencies and the private operators. Even on training, NAMA trains more personnel than the NCAA.”

But an engineer with the defunct Nigeria Airways, Charles Amokwu, declared that the NCAA’s role was often misunderstood because its infrastructure is not physical.

Amokwu argued that safety oversight was itself a critical infrastructure.

According to him, aviation safety does not depend only on equipment and facilities, but also on certification, surveillance, enforcement, licensing, accident prevention programmes and compliance monitoring.

He pointed out that without a strong regulator, airlines could not operate internationally, arguing that foreign aviation authorities and ICAO required evidence of effective safety oversight.

The aviation expert maintained that reducing the regulator’s funding could weaken Nigeria’s aviation safety framework and expose the country to possible international sanctions.

He argued that the NCAA’s financial requirements were driven by the need to continuously train inspectors, acquire modern surveillance systems and maintain compliance with global aviation standards.

He added: “Every credible aviation regulator must remain ahead of the industry it regulates. The NCAA, like every other regulatory authority, needs more, not less, funding.

“Every regulator must be ahead of the industry it regulates or at least equal to it in terms of skill and knowledge. That translates to a lot of money in relevant and up-to-date training.”

Aviation consultant, Ayoola Araba, maintained that government deductions from aviation agencies’ revenues ultimately create additional pressure on the agencies, airlines and passengers.

Araba noted that if the NCAA needed its revenue for safety, there should be zero internally generated revenue remitted to the government.

He stated that airlines struggling with high operational costs could represent a greater safety concern if they were unable to maintain their operations adequately.

“I think airlines not having sufficient revenue to operate safely is a bigger risk to the sector, especially since the NCAA is operating on half of their revenue and doesn’t appear to be short of funds as a result

“Stopping government deductions from aviation agencies’ revenues could provide room for a reduction in charges paid by passengers and airlines. It would not cost the NCAA anything but benefit service providers and passengers,” he said.