Nigeria Content Online

Professionals in
Nigeria’s aviation sector are divided over the ‘pay as you go’ mode of
payment which was recently introduced by the Nigerian Airspace
Management Agency (NAMA) and aimed at collecting terminal navigational
charges from domestic airlines.

The fuss generated
by the new levy since it was introduced on September 1 has resulted in
series of complaints and reactions from some airlines. The development
resulted in 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’.

Lateef Lawal, an
analyst with over two decades experience in the country’s aviation
industry, and the editor of Nigerian Aviation News in Lagos, said the
objections by domestic carriers on the new charges are “unnecessary”,
adding that the airlines are looking for ways to evade the payment for
services rendered to them by service providers in the sector.

Debt owed FAAN

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 the 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 him, a
ministerial committee was later set up to look at all the issues at
stake and come up with recommendations, adding that members of Airline
Operators of Nigeria (AON) were part of the committee, along with those
of the ministry and all the 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 across 36 months, while they
should henceforth make it a point of duty to always pay for services
rendered to them,” he said.

He explained that
the recommendation, among others, was endorsed by the minister for
implementation. “This is what NAMA started to do on 1st September this
year.”

He said that it is disturbing for airlines with whom such agreement was reached to want to renege on the arrangement.

Different views

However, Gabriel
Olowo, a seasoned expert in the sector and chief executive of Sabre
Travel Network, said that the answer to the ongoing disagreement was to
“abolish ticket sales charge.” He said that the Airline Operators of
Nigeria had in the 90’s agreed to give five percent of what they get
from the sales of air tickets to the government to enhance the aviation
sector, adding that the amount was meant to cover any other levy on the
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 the early 90’s had a
gentleman’s agreement with government to contribute five percent of all
ticket sales for aviation development having appreciated the financial
needs of our airports and airspace,” Mr. Olowo 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,” he added.

Mr. Olowo disclosed that it was after the agreement that NCAA became independent.

“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 is tantamount to eating your cake and wanting to have it,” he
said, stressing that the levies on domestic airline tickets are
exorbitant.

“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 the already difficult
business environment,” Mr. Olowo said.

The Nigerian Civil
Aviation Authority (NCAA), the regulator of the aviation industry, is
yet to make any public states on the issue.