Imperatives of five per cent charges, sharing formula review in aviation 

Until the Federal Government reviews the mandatory charges in the air transport sector and its sharing formula among concerned agencies, the service providers may continue to lack adequate funding for critical infrastructure for safer and efficient aviation industry.

Though the total earnings shared by five major agencies have never been devoid of controversies, more worrisome for stakeholders is the perceived imbalance in the sharing mechanism that is not in tune with today’s service demands.

The Civil Aviation Act (CAA) passed by the National Assembly in 2006, section 12, sub-section 3(a-e), mandates the Nigerian Civil Aviation Authority (NCAA) to collect five per cent charges on Passengers Tickets Sales (TSC), Cargo Freight Charges (CSC), Chartered Flights Invoice Charges (CIC), and share the earnings to the agencies that provide the necessary safety services to airline and private aircraft operators.

The law provides that the NCAA shall earn 58 per cent of the total earning; National Airspace Management Agency (NAMA) 23 per cent; Nigerian Meteorological Agency (NIMET) nine per cent; Nigerian College of Aviation Technology (NCAT) seven per cent, and the Accident Investigation Bureau (AIB) three per cent.

Recall that the NCAA declared ticket sales earnings on two million international passengers for 2015 as ₦385 billion, and ₦330 billion in 2016 for the same number of passengers, and in 2017, for 1.6 million passengers, it declared about ₦411.5 billion.

The estimates were, however, in conflict with the expectations of some stakeholders. More so, the travel agencies, using the International Air Transport Association’s (IATA) figures, estimated over N500 billion in 2017.

Though the NCAA is yet to declare industry earning for 2018 to date, the body of travel agencies, the National Association of Nigerian Travel Agencies (NANTA) has declared N525 billion ($1.5 billion) international ticket sales for 2018.

Secretary-General of the Aviation Safety Round Table Initiative (ASRTI), a think-tank group of the industry, Group Capt. John Ojikutu (rtd), said given the gross difference in figures declared by the apex regulatory body and that independently estimated by the number of passengers, “there is need for the responsible government’s financial accounting authorities to find out from the NCAA the actual earnings on the TSC/CSC/CIS within the periods of 2015 – 2017, and what could have happened to the excess earnings of these years and possibly, those of the previous years before them.”

Ojikutu estimated that the NCAA, by the provision of the Act had been earning, among all others, the five per cent TSC, CIC, and CSC of about ₦50 billion yearly on an average of about ₦1 trillion or $2.5billion from a minimum of about seven million domestic and international passengers and freight charges on over 200,000 tons of cargo recorded each year between 2015 and 2017.

“The five government agencies sharing the TSC/CSC/CIC should, therefore, not be lacking the necessary funds to provide the required safety services for all flight operations and allied services to avoid the incessant lapses associated with the Nigerian aeronautical services. These charges need to be transparently collected, properly accounted for and distributed in accordance with the provision of the Act,” he said.

Ojikutu, a former commandant of the Lagos Airport in the 90s, added that there was no rational to retain the current sharing formula given the expanded scope of services now performed by all the agencies.

NAMA, for instance, undertakes the Air Traffic Services for all commercial and private flights including military aircraft traffic. NAMA services consist of Air Traffic Control Services, Flight Information Service, Aeronautical Information Services, Alerting and Emergency Services and the coordination of Search and Rescue Services.

To enhance the safety of its control services, NAMA has a number of navigational and control equipment ranging from Surveillances Radars, Very High Frequency Omni Directional Radio Range (VOR), Distance Measuring Equipment (DME), Instrument Lighting System (ILS), Very High Frequency(VHF), and High Frequency (HF) Radio Communication among others.

“All these are located within and outside 26 federal and states airports. The control services and the equipment are manned 24/7 by about 809 Air Traffic Controllers, maintained by 519 engineers and technologists, 48 ICT staff and supported by 1205 administrative, finance and other supporting staff, altogether; 2581 personnel.

“A review upward of the NAMA shares in the TSC/CSC/CIC earnings from 23 per cent to 35 per cent is very necessary to avoid the danger of the critical safety equipment from exceeding their operational tolerant limit after their scheduled time for maintenance or calibration,” Ojikutu said.

NIMET, like NAMA, has hundreds of equipment at all the airports and outside the airports to assist it to provide accurate weather reports and forecast not only for aeronautical services but also for maritime, environment, and agricultural services.

These equipment like those of the NAMA need regular maintenance and calibration at cost. A review of its share upwards in the TSC/CSC/CIC is recommended from nine to 12 per cent would not be out of place.

NCAT is the only government training institution in various aviation faculties in Nigeria. It used to develop manpower for Nigeria Airways back in the days. Today, the faculties of training include pilots, air traffic controllers, flight and aircraft engineers, and cabin crew.

“Today, not many individuals or private airline operators can afford the full cost of training in any aeronautical studies within and outside the country without government subsidy. The intervention can come in through the improvement of NCAT shares in TSC/CSC/CIC by reviewing the share upward from seven to 12 per cent.”

He said further that the AIB, in the light of the recent giant strides in accident investigations and safety recommendations, coupled with the appeal for proper funding, is deserving of six per cent of the total earnings in the industry.