Suspend automation of airlines’ revenue remittance, AON tells FG

Umbrella body of airline operators in the country, the Airline Operators of Nigeria (AON), has called for the suspension of automation of revenue remittance by airlines to the Nigerian Civil Aviation Authority (NCAA) until the parameters that constitute the 5% Ticket and Cargo Sales Charge are clearly and properly defined.
AON made the appeal in a media parley held at Murtala Muhammed Airport 2 (MMA2) on Monday, stressing that the organisation has no problem with the Authority going ahead to automate the collection and remittance of the said charges, but that the NCAA needs to give clarification on what constitutes the five per cent Ticket and Cargo sales Charge 5% TSC.
The AON Chairman, Capt. Nogie Meggison, who spoke on behalf of airlines, pointed out that such charges are only applicable on NUC fare in compliance with industry practice and as currently applicable to international carriers operating out of Nigeria, adding “AON members are currently remitting the 5% TSC charges and it is on record that NCAA introduced financial clearance process for services over the last year. Despite our members improved payment, infrastructure and service level continue to deteriorate across all facets of the industry under the same Authority”.
According to him, AON also has issues with the immediate mandatory automation without first addressing the cost of integration while sadly at the same time not asking the foreign carriers operating in Nigeria to join the same Automation platform and are charged on their base fares.
“This is wrong and discriminatory and also against ICAO Non-Discriminatory policy. As per a recommendation adopted … by the ICAO Council, States are encouraged to incorporate the four key charging principles of non-discrimination, cost-relatedness, transparency and consultation with users into their national legislation, regulation or policies, as well as into their future air services agreements. (Source: ICAO DOC 9082)”, he said.
He said: “It is apparent that NCAA is preying on domestic airlines, which they see as an easy target, a cash cow and for cheap publicity, over regulating domestic operators, and pushing domestic airlines to the edge of insolvency/ bankruptcy. It is this kind of policy that has reduced the lifespan of Nigerian airlines and has consumed over 25 airlines in the last 30 years since deregulation in 1982.
“While the same NCAA is weak and has turned blind eyes in enforcement of other sectors, i.e runway quality, airport fencing, bird strike, Navaids, fuel quality control by oil marketers, poor quality delivery by service providers, and Agencies inflicting unauthorised and illegal billing contrary to the provisions of the 2006 ACT. (Part V (12)(2))”.
Speaking further, Meggison pointed out that AON is tired and cannot continue to be the only soft target or easy prey, just as he appealed to the NCAA, to rather focus their energy on being an enabler and to foster growth in the Nigerian aviation industry in line with their Mission Statement.
“While other West African countries’ airlines operate 24 hours, Nigerian carriers are subjected to daylight operations only till 6:30pm in most our airports. Yet the West African charges are almost a fraction of Nigeria’s domestic billing. Sadly also, Nigerian airlines are the only mode of transport paying VAT. Marine, road and rail transport don’t pay; and even the foreign airlines operating into Nigeria are exempted from paying VAT in Nigeria FIRS (Part L Sub Section (b) No. 8 – VAT INFO 9701(3) and their home base. It is interesting to note that Ghana, only on March 30, 2017 announced the cancellation of VAT on domestic and intentional air travel”, he said.
The AON Chairman added that during a recent meeting between AON and NCAA, the DG had agreed to look into the matter by considering using a flat rate that is tied to the United States Dollar as a possible way of addressing the matter similar to what FAAN does with the Passenger Service Charge (PSC), and the norm method of billing in most parts of today’s world.
To this end therefore, the airline operator averred that the ultimatum issued by the NCAA to operators can’t be said to have been done in good faith, because the authority was yet to respond to the issues raised on the matter in previous meetings between NCAA and AON where both parties had agreed.
The Nigerian Civil Aviation Act 2006 prescribes the need to carry out periodic review of the Air Ticket and Cargo Sales charge in consultation with stakeholders. However, the one-sided implementation of the law whereby stakeholders are not consulted before decisions are reached does not augur well for the growth of the industry.
The AON chairman said: “There is need for the NCAA to be transparent with the process of reviewing the collection of the five per cent charge, as the AON would prefer the International Air Transport Association (IATA) to drive the implementation of the automation and collection of the charge for the authority; the norm worldwide. Moreover, the third-party firm commissioned by NCAA to do the collection, is a private company that has never been tested nor trusted; and why a third party?