Airline operators to the NCAA: you lied! “All services are fully prepaid based on cash payment before service”

Air Operators of Nigeria (AON) has reacted to claims that its members are indebted to the Civil Aviation Authority of Nigeria (NCAA) for services rendered by the agency.

The association said in a statement in Lagos on Monday that all services rendered by the NCAA to domestic airline operators were fully prepaid on a cash-before-service basis.

AON also said the NCAA issued invoices for all regulatory services provided, including validation of crew operating licenses, aircraft inspections and documentation renewal.

He stressed that airline operators were required to settle such fees in advance, saying compliance had been rigorous.

“Practically speaking, no domestic airline in Nigeria receives NCAA regulatory services without first making full payments.

“This long-standing policy and procedure remains firmly in place.

“As a result, the assumption that domestic airline operators are indebted to the NCAA for regulatory services is factually inaccurate.

“What the NCAA calls ‘pending charges’ refers exclusively to the 5% Ticket Sales Commission (TSC), a tax imposed by the NCAA on passengers for no services rendered to passengers,” he said.

The association said the tax was not in consonance with the dictates of international aviation.

“This is completely different from regulatory service fees,” he said.

‎The AON further alleged that several airlines maintained dedicated accounts from which the NCAA withdrew monthly remittances until the Force Majeure caused by the Iran/Israel/US conflict affected global aviation.

According to AON, the operators have appealed to the federal government through the office of the Minister of Aviation and Aerospace Development to temporarily suspend payment of all fees required by law.

The suspension is intended to assist airline operators in managing cash flows during the period of severe financial stress caused by the rising cost of Jet A1 (aviation fuel).

‎It is noted that President Bola Tinubu has granted a 30% concession, adding that AON awaits the Federal Government’s decision on other aspects of the association’s application for intervention.

He called on the federal government to amend the Civil Aviation Act to empower the NCAA to collect appropriate fares directly from passengers without routing them through domestic airlines, starting in June.

“This will relieve domestic airlines of the financial burden of acting as collection agents for the NCAA, since airlines currently incur bank transfer fees and other transaction costs in the process of transmitting funds to the NCAA.

“‎The 5% fee for the ticketing service in question was introduced over 50 years ago under General Gowon’s government by the then Federal Civil Aviation Authority (FCAA).

“Its continued relevance has not been revisited since.”

He said the FCAA evolved over time into different agencies such as the NCAA, the Nigerian Airports Authority, which later evolved into the Federal Airports Authority of Nigeria and the Nigerian Airspace Management Authority.

“With the creation of each of these agencies, separate taxes, fees, charges and levies were introduced for Nigerian airline operators to cover their respective services.

‎

“‎Meanwhile, the 5% TSC, which was originally a policy tool, was sneaked into legislation by the NCAA, despite vehement opposition from the AON and other industry stakeholders.

“Domestic airlines, in addition to this 5% TSC, still pay separately and directly for services provided by various agencies, including the NCAA.”

‎The association called on the federal government to review all forms of levies imposed on domestic airline operators.

“The financial impact of these taxes, duties, charges and levies is negative and burdensome especially in this period, in which the entire world has been exposed to the exogenous shocks of the Iran/Israel/USA crisis.

‎

“‎The aviation sector is critical to the economy as a catalyst and facilitator of economic growth.

“The survival of the sector therefore requires urgent and deliberate political action,” AON said.