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Recovery of N30b debt may ground domestic airlines

By Wole Oyebade
12 August 2016   |   4:52 am
Despite the plummeting fortunes of domestic airlines in the country due to the harsh economy, they will have to pay up their debts worth more than N30 billion or be grounded by regulatory agencies.
Nigerian Civil Aviation Authority

Nigerian Civil Aviation Authority

NCAA, FAAN, NAMA set to implement decision

Despite the plummeting fortunes of domestic airlines in the country due to the harsh economy, they will have to pay up their debts worth more than N30 billion or be grounded by regulatory agencies.

The Nigerian Civil Aviation Authority (NCAA), Federal Airports Authority of Nigeria (FAAN) and the Nigerian Airspace Management Agency (NAMA) are going after airlines to recover over N30 billion debts accumulated in the last 16 years.

The Guardian learnt that the renewed debt recovery, following a directive from the Federal Government, will involve the deployment of all means possible to succeed, including grounding some airlines that have not embraced the option of a peaceful resolution.

The debts were incurred from sundry services offered to commercial and chartered airlines operating on government-owned and private aerodromes.Sources disclosed that one of the most popular airlines in the country is indebted to FAAN to the tune of N12.5billion, and would soon be shut out of some routes. NAMA confirmed the development, estimating that N8.08 billion debt liabilities are to be reclaimed from airline operators and private and some state-owned airports.

A document shown to The Guardian revealed that domestic operators collectively owe NAMA N3.89 billion between 2001 and 2013. While that is still unpaid, the domestic airlines have also accrued N1.6 billion from January 2014 to June 2016. Some airlines that are already defunct are owing NAMA N1.048 billion, while private and state-owned aerodromes owe N1.54 billion.

A member of NAMA special committee on debt recovery said the agency was under enormous pressure to meet the Federal Government’s revenue target, coupled with an in-house liability burden, which the agency has to meet, especially on pension. Pension outstanding in the agency is in the tune of N18 billion, it was learnt.

The director, who spoke on the condition of anonymity, said: “The government of the day has a lot of expectations from ministries, departments and agencies, and you either deliver or you are out.

“The Federal Government has directed that 25 per cent of revenue should be remitted to government’s account. We are left with no option than to re-strategise and go all out to recover all outstanding debts. They (airline operators) are our customers and we respect them, but times are different and debts must be recovered using all means under the law.”

Feelers from the aviation sector suggest that “the big stick measure and pay-as-you-go” regime will worsen the plight of domestic airlines that are already gasping for breath amidst huge debts to banks, foreign exchange hike, unpaid salaries, low patronage and fuel shortage.

The Chairman of the Airline Operators of Nigeria (AON), Capt. Nogie Meggison, appealed for the Federal Government’s intervention in the aviation fuel crisis and multiple charges, saying the local airlines were more at risk of folding up.

With a litre of aviation fuel now sold for N220-plus, more than 40 per cent of the airlines’ operation cost goes into fuel.“It is very sad to note that despite all these burdens on the shoulders of the Nigerian airlines, they are still expected by the Federal Inland Revenue Service (FIRS) to pay taxes out of their losses. Multiple and excessive taxation from the NCAA, FAAN and NAMA is making it more expensive to run an airline in Nigeria,” he said.

A top official in NAMA, however, denied the allegation of multiple charges and an alleged plan by government agencies to regulate airlines to extinction.
“It will interest you to know that some of these people have for several years been cutting corners and using friends in authorities to evade paying dues. But the current government said there is no room for such things.”

“The issue of multiple charges has been resolved since the time of Chidoka. More so, we have not increased our charges. We are not convinced that the sector is as bad as bandied about. Within this debt recovery exercise, we have one domestic airline that has fully cleared its debt,” he said.

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