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Local airlines’ debt burden hits N45.29 billion

By Wole Oyebade
31 August 2022   |   2:41 am
Crisis rocking local operators, yesterday, took a new turn as the Nigerian Civil Aviation Authority (NCAA) ordered the airlines to begin repayment of debts in excess of N45.29 billion.

Airplane. Photo: Getty Image

NCAA gives marching order on the payment
• Pushback on alleged multiple charges

Crisis rocking local operators, yesterday, took a new turn as the Nigerian Civil Aviation Authority (NCAA) ordered the airlines to begin repayment of debts in excess of N45.29 billion.

The apex regulatory body, which accused the operators of a deliberate ploy to stifle regulators and service providers out of operations, said airlines accumulating debts would no longer be accepted.

Emerging from a round-table meeting between the regulator and operators in Abuja, yesterday, it was learnt that the debts local airlines owed the NCAA on statutory five per cent Ticket Sales Charge and Cargo Sales Charge (TSC/CSC) has lately risen to over N19 billion and $7.8 million (N3.29 billion).

The airlines are also indebted to the Federal Airports Authority of Nigeria (FAAN) and the Nigerian Airspace Management Agency (NAMA) to the tune of N18 billion and N5 billion, in that order. The airlines owe FAAN landing and parking charges, while they are also hugely indebted to NAMA in terminal and navigational charges.

Director-General of the NCAA, Capt. Musa Nuhu, warned that if the debts owed to the agencies were not paid back immediately in the next few weeks, the aviation agencies may collapse very soon.

Nuhu gave the operators a one-month ultimatum to sign a Memorandum of Understanding (MoU) with NCAA, detailing their debt repayment plans to the agency.

The Minister of Aviation, Hadi Sirika, had in November 2020, complained that the local airlines owed N22 billion to their regulator and service providers.

The demand for the debt that has now more than doubled is, however, coming at a time when the airlines are hard-pressed by existential challenges of aviation fuel, forex liquidity crisis, and attendant dip in capacity.

Nuhu expressed disappointment over a letter that emanated from the Airline Operators of Nigeria (AON) and signed by its president, Abdulmunaf Yunusa, which accused the agencies, especially the NCAA, of muscling out the operators through multiple charges.

Though he acknowledged that the airlines and the entire aviation industry were going through a very difficult period, especially at this time, the DG insisted that all the charges collected by the 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 collect such on behalf of the agencies from the passengers and wondered why the operators would accuse the NCAA of engaging in multiple levies.

Nuhu further debunked the claim that the NCAA imposes excess baggage charges on airlines. He compared the levies imposed on operators in Nigeria and Ghana and highlighted the huge differences.

He explained that for any of the charges to be repealed, the parliament would have to work on it and the president would endorse it.

“NCAA relies on its Internally Generated Revenue (IGR) 100 per cent. The five 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 refuse 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 defund 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,” Nuhu said.

Acting Managing Director of NAMA, Mathew Pwajok, reiterated that the charges of the agency were minimal when compared to other countries.

Pwajok, however, disclosed that the airlines owed over N5 billion for services rendered to them over the years.

Also, Capt. Rabiu Yadudu of FAAN disclosed that the airlines owe the agency N18 billion and debunked the claim that it charges the airlines indiscriminately as claimed in its letter.

Yadudu 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 that of the local airlines was reviewed last in 2002.

Managing Director of Overland Airways and a trustee of AON, Capt. Edward Boyo, apologised to the NCAA for the letter.

“I’m a trustee member of AON. On behalf of AON, I hope to apologise to you for 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.

Vice President of AON, Allen Onyema, said he was seeing the letter for the first time and expressed disappointment with some of the contents.

Onyema regretted that there are factions in AON, which had prevented them from speaking with one voice.
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