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NCAA defends five per cent ticket sales charge

By Wole Oyebade
07 October 2016   |   4:17 am
The Nigerian Civil Aviation Authority (NCAA) has defended the mandatory five per cent Ticket Sales Charge (TSC) it collects through the operators, saying it has no connection ...


As stakeholders harp on integrity in sector

The Nigerian Civil Aviation Authority (NCAA) has defended the mandatory five per cent Ticket Sales Charge (TSC) it collects through the operators, saying it has no connection with the financial distress faced by some domestic airlines.

NCAA, which is the apex regulatory authority in the sector, said contrary to claims by operators, the passengers rather than airlines are charged and must be sustained as mandated by the law.

In a related development, stakeholders have identified the dearth of integrity and transparency as one of the fundamental reasons the sector is in dire straits.

The concerned parties, made up of operators, regulators, consultants and keen observers, at an aviation integrity summit organised by Aviation Monitor Limited in Lagos, levied sharp practices against some operators and regulator that have further set the air travel business on the back foot.

Director General of the NCAA, Capt. Muhtar Usman, noted that the operational guidelines were clear on the charges and in fact entrusts in the hands of operators to collect the charges for the sustenance of the operating environment.

Usman noted that section 12 (1) of the Civil Aviation Act 2006 says that there shall continue to be a five per cent air ticket contract, charter and cargo sales charge to be collected by the airlines and paid over to the Authority.

“Where lies our business integrity if we cannot give back what is entrusted into our hands to the owner. Even on request, we shy away from our responsibility of paying back the entrusted money to the appropriate owner,” he said.

It would be recalled that calls have been made lately on the need to reduce multiple charges on the operators, especially in the face of huge indebtedness to NCAA and other regulatory agencies.

The DG, however, said it was unfortunate that some of the operators could not ddistinguish between operational cost and profit margin.

“A good businessman endeavours to separate the profit margin with the operational cost. And if we were doing this, we would have been able to separate the five per cent Service Charge from the real ticket sales and draw our operational/profit margin from the actual.

“NCAA has reports that some airlines have tagged the five per cent Ticket Sales Charge (TSC) and five per cent Cargo Sales Charge (CSC) as a tax or levy and as such has become a drain on their earnings.

“This is a misrepresentation of the fact. Passengers, as contained in the ticket, pay the TSC. The airlines role is to collect and remit same to the regulatory authority,” he said.

Usman said instead of grumble over charges, operators in the aviation industry should rather take advantage of the e-payment system to lessen the burden remitting to the appropriate authority.

“Let me state that the TSC and CSC are collected at source from passengers by airlines on behalf of the Federal Government, to enable all aviation agencies to tackle safety critical issues as they arise to engender safe, secure and efficient air transportation and allied services for the overall benefits of all stakeholders.

Capt. Muhtar Usman DG NCAA

Capt. Muhtar Usman DG NCAA

“I urge airlines/service providers to be opened to suggestions and use the feedback mechanism to grow their business. They must be willing to take responsibility for their actions especially when there is a system default in their operations,” he said.

Director of Legal Services, Nigerian Airspace Management Agency (NAMA), Anastasia Gbem, stressed that it was important for all parties concerned to work within the framework of the rules and regulations.

Gbem said taking the five per cent ticket sales that belongs to government agency and putting it in your business is bad practice.

“There is so much impunity in the system because of lack of integrity. So, attitudes to business must improve for industry to grow,” she said.

Chairman of Airline Operators of Nigeria (AON), Capt. Nogie Megisson, insisted there was no way the domestic airlines in Nigeria would survive with the existence of too many charges from both within and outside the sector, requesting that airlines should be involved in policy making processes from design point.

Apparently in agreement with Meggison, President of Aviation Round Table, Gbenga Olowo, added that to achieve integrity in the system, there is a need for an upward review of airline fares to a more appropriate fare, considering the rate of inflation over the years.

Chairman of National Association of Government Approved Freight Forwarders (NAGAFF), Dr. Segun Musa, on his part appealed to authorities to avoid giving undue advantages to some operators in the cargo sub-sector, which he said, encourages deliberate breach of standards by others who feel there is no integrity in the system.

Musa queried the restriction of number of licensed ground handling companies in Nigeria to two, calling for a comprehensive transport policy in the country in order to address integrity issues.

Chief Executive Officer of Aviation Monitor Limited, Albinus Chiedu, said the summit was convened to evaluate the level of integrity in business transactions, interactions, agreements and contracts implementation as well as respect for laws and morality in various dealings that occur in Nigeria’s aviation industry.