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Aviation for Wednesday

Operators, regulators and the unending aviation crisis

There’s a raging controversy between Nigerian airlines over alleged multiple charges by government authorities and the indebtedness on the part of the airlines. Daily Trust reports

From Abdullateef Aliyu, Lagos

Two weeks ago, the Nigeria Civil Aviation Authority (NCAA) issued a two-week ultimatum to airlines that default in the remittance of their five per cent Ticket Sale Charge (TSC) and Cargo Sale Charge (CSC). The authority threatened to take punitive measures against debtor airlines including adopting a naming and shaming method through publication of the affected debtor airlines on national dailies.

It would be recalled that prior to the latest two-week ultimatum which lapsed this week, the authority had issued a 30-day ultimatum which took effect from August 1 to August 30. Following the inability of the affected airlines to substantially comply, the NCAA issued a fresh ultimatum directed at airlines “that are still dragging their feet” on the TSC and CSC. The charges, according to the NCAA, are to be collected from the passengers on behalf of the aviation agencies.

Briefing newsmen recently, the Director-General of NCAA, Capt. Muhtar Usman said in as much as the authority is averse to engage its clients in the public, all appeals and entreaties to persuade the airlines to pay their debts have proved futile. He said the authority is left with no other option than to issue the ultimatum because the non-remittance of the TSC and CSC is affecting the operation of the agencies that are supposed to share the five per cent charge.

Following the issuance of a fresh ultimatum, the Chairman of Airline Operators Association of Nigeria (AOAN), Capt. Noggie Megisson expressed dismay with the decision of the NCAA, saying the airline operators had at a meeting with the officials of Ministry of Aviation agreed to go and check their records and reconcile the figure with a view to determining the actual indebtedness of all airlines.

Besides the confrontation with the NCAA, the Federal Inland Revenue Service (FIRS) recently threatened to ground the operation of four airlines over indebtedness.

According to a source in the NCAA, most of the airlines are owing the agency billions of naira in TSC and CSC. “Unfortunately, they are dragging their feet and not showing any seriousness to pay this money. That’s why the NCAA has taken the decision it took to give them ultimatum to pay this money or face sanction”.

Irked by this development, the Arik Air Chairman, Chief Joseph Arumemi-Johnson called on the NCAA to withdraw the ultimatum, describing it as embarrassing. The Chairman who made his position known during a recent Aviation Roundtable event, said no Nigerian airline is weak but they are battling with bad policies propelled by the government, adding that government is killing local airlines through heavy charges.

He said, “The government is not protecting the local carriers. No single cash was given to local airlines in the last intervention funds, rather, the money was used to bailout the banks. Kenyan

Airways lost $260 million recently and the Kenya Government just last week bailed out the airline with $500 million.”

Also speaking on behalf of AOAN at a stakeholders’ workshop on the proposed amendment of the Nigeria Civil Aviation Regulations, Captain Mohammed Joji of Sky Power Express Airways lamented that authorities arbitrarily increase charges without consultation with airline operators. According to him, the arbitrary and multiple charges imposed on airlines are weakening their capacity to pay staff salaries.

He said before any increase in charges should be effected, all stakeholders must sit down and deliberate before new charges are imposed.

He regretted that for instance there had been 100-300 per cent increase in charges without the airlines being consulted, describing the development as “unnecessary and inappropriate”.

“You can’t wake up one day and increase your charge”, he said, noting that only the NCAA has power to approve charges while other aviation agencies should seek NCAA’s approval before imposing any charge.

Joji stressed that it is very expensive to fly Lagos to Jos because of the high number of charges an airline has to pay which include fuel charge, five percent Ticket Sale Charge (TSC), spare parts deduction, staff training deduction, FAAN terminal charges, Service Recovery Charge (15 % terminal charges), fuel surcharge, land lease charge, among others.

“You are imposing all these charges and I still have to pay my staff at the end of the month”, he reiterated.

Also speaking with our correspondent, the Managing Director of Med-View Airline, Alhaji Muneer Bankole also stressed that the heavy charges imposed on airlines are killing and discouraging people from starting the business.

He said, “We’ve been appealing to the government. Government regulatory policies should be very open. You don’t emphasize rules…It is my country, I don’t see why I should be paying NAMA for flying Lagos-Abuja return, the sky should be free for Nigerians, you make your money from other people, we would be paying.

“For landing our aircraft, we would be paying landing tower, we would be paying, paying, paying and paying. Why are we paying? That’s the main problem of this industry. I don’t see a reason why we should be paying. Even if the customers pay, we pay FIRS, VAT for what? Are the FIRS providing toilet like FAAN or are they providing something like that? That’s absolutely zero. So those are the problems. Let’s tell you the truth, there are lots of charges that run the business away from the people to do the business.

“A lot of people run away. When you sell ticket at N10, 000 or N15, 000, you pay about 10 per cent- five per cent to FAAN, five per cent to NCAA, five per cent to FIRS. So, where’s the money?”

On the alleged indebtedness by airlines, the MD who clarified that he is speaking as an individual said, “Let me be honest with you. We held a meeting with the Permanent Secretary, Ministry of Aviation, Director-General of the NCAA and some of the top managers of the airlines, I am not speaking for anybody, but we have actually made known to agencies, they are working to provide services and they are collecting money, they must provide those services. It is not just to bring figure on the table. We’ve resolved now that they should call our airlines together and do what we call reconciliation, those figures, I will not speak for anybody, I think they are not correct. You just placed figure without talking to the other party, where did you extract figure? Is it not from his record? It should be from the record of the airlines. And there must be two people at a meeting point to say, ‘ok, you have done 40 flights, I am entitled to collect this amount of money and therefore, you are paying me this’. So they need to do those things”.

Analysts are of the view that the Federal Government, through the Ministry of Aviation, has to come in, examine the financial issues and explore avenues to resolve the lingering crisis.

Travelling abroad by air dropped by 27.93% in Q2

By Francis Arinze Iloani

The second quarter of this year saw declines in internationally travelling passengers from Nigeria by air by 406,369 passengers or 27.93 percent from quarter.

The Nigerian Aviation Sector report for the second quarter of this year released over the weekend by the National Bureau of Statistics (NBS) revealed that 1,048,598 passengers travelled abroad by air in the second quarter, translating into 27.93 percent decline from the number recorded at the first quarter of the year.

The NBS reported that domestic travel showed a marginal rise quarter on quarter, with 16,752 or 0.71 percent more passengers travelling in the second quarter.

The report revealed that 2,374,479 passengers travelled domestically by air in the second quarter, representing 69.37 percent of the total number of passengers that travelled by air in the period.

Analysis revealed that the total number of people that travelled by air within the period both domestically and internationally was up by 7.53 percent points from the preceding quarter and yet down 1.35 pefcent points from second quarter of last year.

“Year on year, both domestic and international passenger numbers were lower, with 73,492 or 6.55 percent fewer international passengers and 335,908 or 12.39 percent fewer domestic passengers relative to the corresponding quarter of the preceding year,” the report stated.

The NBS reported that the only airports to record positive year on year growth were Katsina, increasing by 668 passengers or 319.62 percent, Owerri, which increased by 9,243 passengers or 11.12 percent and Yola, increasing by 1,121 passengers or 3.09 percent.

The report showed that at 728,064 passengers, 69.43 percent t of all internationally bound passengers traveled through Lagos’ Murtala Muhammed International Airport in the period.