Airlines’ indebtedness to NCAA hits N15bn

Posted on by Wole Shadare

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*No going back on automation, may penalise defaulting carriers
 
 
The Nigerian Civil Aviation Authority (NCAA) has put the total indebtedness of airlines to the aviation regulatory body at N15 billion.
 
Many of the debtor airlines have closed shop while many others that are still in operations are precariously hanging. It remains to be seen how the agency recovers these debts from defunct airlines; thereby amounting to bad debts.
 
Spokesman for NCAA, Sam Adurogboye stated that the shocking aspect of this was the fact that the carriers had already collected the five per cent charge from travellers and failed to remit them, describing the action as criminal.
 
This five per cent indebtedness to the carriers was as a result of non-remittance of NCAA’s money to it.
Ncaa
 
This is coming as he said the agency it won’t go back on its earlier directive on automation of remittance of the five per cent ticket and cargo sales charges, warning that the agency would take appropriate action against any erring airline.
 
According to him, domestic airlines have not joined the International Air Transport Association/Billing Settlement Plan (IATA/BSP), stressing that the Aviation Revenue Automation Projects (ARAP) is an alternate means of compliance to smooth remittance provided by the authority in line with Federal Government’s directive.
 
He reiterated that the directive to automate covers both domestic and foreign airlines, disclosing that foreign airlines have complied fully by remitting their collections through the IATA/BSP.
 
The NCAA and airlines had been at loggerhead over the automation of remittance platform and what the carriers said constitutes five per cent of what is regarded as TSC.
 
Curiously, the airlines which had been paying this charge since 2006 have asked the aviation regulatory body to stop, describing it as multiple taxation.
 
 
Chairman, AON, Capt Noggie Meggison had on Monday called for the suspension of automation of revenue remittance by airlines to the NCAA until the parameters that constitute the five per cent Ticket and Cargo Sales Charge are clearly and properly defined.
 
Meggison explained that the operators had no problem with the authority going ahead to automate the collection and remittance of the said charges, but challenged the NCAA to give clarification on what constitutes the five per cent Ticket and Cargo sales Charge.
 
He stated that operators are currently remitting the five per cent 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.”
 
Adurogboye, on his part said for the purpose of clarity, “The regulatory authority wishes to state that the five per cent ticket and cargo sales charges are revenue accruable to the aviation agencies through NCAA. This is contained in Part V Section 12(1) of the Civil Aviation Act 2006.”
 
This section, he said, merely mandates the airlines to collect the charges paid by the passengers on behalf of NCAA and remit same appropriately and in real time which have not been so.
 
“There is no ambiguity with regard to the components of the billing of the charges, Part 18.12.4. of the Nigeria Civil Aviation Regulations (Nig.CARs 2015) clearly provides that “the 5% air ticket sales charge shall be based on the total cost of travel paid by passengers to the airline. This shall be the cost of ticket inclusive of fuel surcharge or any other charge added to the total cost of travel by the airline exclusive of government value added tax or any other tax that may be imposed by government from time to time.”
 
“Therefore for the avoidance of doubt, all airline operators should be guided by Part 18.12.5.which says “all domestic and international airlines operating in Nigeria shall forward to the authority through an electronic platform provided by the Authority, all relevant documents such as flown coupons, passenger or cargo manifests, air waybills, load sheets, clients’ service invoices and other documents necessary for accurate billing within 48 hours after each flight.”
 
The NCAA said in realisation of this, the Federal Government of Nigeria had approved the introduction of Aviation Revenue Automation Project (ARAP) for revenue collection to aid data integrity, transparency, transaction accountability, controls and revenue assurance to the authority in 2011. He noted that this is at no cost to the operators.
Wole Shadare