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Industry
professionals in Nigeria’s aviation sector hold divergent views on the
‘pay as you go’ mode of payment recently introduced by the Nigerian
Airspace Management Agency (NAMA) for collecting terminal navigational
charges from domestic airlines.

Some
experts favour the initiative, but other stakeholders in the sector see
the development as cumbersome and an additional tax on the highly
levied air tickets.

The
‘pay as you go’ fuss, which for two weeks resulted in series of
complaints and counter reactions from some airlines, saw to the
grounding of Arik Air’s 120 domestic flights in one day, and led to the
introduction of N100 additional ticket charge by Aero Contractors,
which the carrier described as “NAMA Tax.” Explaining that the
objections of domestic carriers to the new charges are “unnecessary,”
Lateef Lawal, an analyst who has spent over two decades in the
country’s aviation industry and the editor of Nigerian Aviation News in
Lagos, said that the airlines are looking for ways to evade the payment
for services rendered to them by service providers in the sector.

Mr.
Lawal argued that all domestic carriers in Nigeria jointly owe the
Federal Airports Authority of Nigeria (FAAN) and the Nigerian Airspace
Management Agency (NAMA) a “whooping N10 billion if not more,” out of
which over N4 billion is owed NAMA.

“Prior
to 1st September 2010 when the management of NAMA took the bull by the
horns after the directive of the Minister of Aviation for aggressive
revenue and debt recovery drives, there had been several meetings
between NAMA officials and those of the debtor airlines on debt
reconciliations.

Some attended others blatantly refused to attend,” he said.

According
to Mr. Lawal, a Ministerial Committee was set up to look at all the
issues at stake and come up with recommendations on the ways out and
members of Airline Operators of Nigeria (AON) were part of the
committee along with ministry officials and others from parastatals in
the industry.

“After
the committee’s two-week sitting they came up with far reaching
recommendations which included the spreading of the old debt owed by
the airlines since 2005 to June 2010 to be spread across 36months while
they should henceforth make it a point of duty to always pay for
services rendered to them,” he said, adding “this recommendation among
others was endorsed by the Minister for implementation, which was what
NAMA started on 1st September this year.” He said that it is surprising
to see an about turn by the airlines that were part and parcel of the
report to which their representatives at the Ministerial Committee
Meeting appended their signatures.

Different views

However,
Gabriel Olowo, another expert in the sector and chief executive of
Sabre Travel Network, said that the answer to the ongoing palaver is to
“abolish ticket sales charge.” Mr. Olowo posited that the Airline
Operators of Nigeria had in the 90’s agreed to give five per cent of
what they get from the sales of air tickets to the government to
enhance the aviation sector, adding that the contract should replace
whatever levy is placed by any government organization on airlines.

“We
ordinarily should not speak on the matter waiting before the Supreme
Court of Nigeria; but throwing light into the history of Ticket Sales
Tax, Airline Operators of Nigeria (AON) during early 90’s had a
gentleman agreement with government to contribute five per cent of all
ticket sales for aviation development having appreciated the financial
needs of our airports and airspace,” he said.

“While
this subsists, it is expected to replace and substitute whatever charge
these institutions may have legitimacy to charge. There exists a
sharing formula for the fund by the agencies.” Mr. Olowo said that it
was after the agreement that the Nigerian Civil Aviation Authority
(NCAA) got its independence and the Federal Airports Authority of
Nigeria (FAAN) commenced taxation on airlines, stressing that the
levies on domestic airline tickets are exorbitant.

“NCAA
thereafter became autonomous and FAAN was collecting passenger service
charge (PSC) known as airport tax, in addition to its Landing and
Parking fees. NAMA saw the sense also in collecting Terminal
Navigational fees which tantamount to eating your cake and wanting to
have it as this amounts to double taxation,” he said.

“As you are already aware, Airline ticket contains too many taxes
(TST,PSC,VAT) and if we are serious about having strong and thriving
Nigerian carriers, additional tax burden on ticket in whatever
nomenclature will simply turn the airlines to revenue collecting agents
in the face of their already difficult environment of business.”