N38B debts: FG gives airlines Jan 1 deadline to automate payment
*Airlines in red, carriers not healthy
In a bid to put an end to airlines indebtedness to aviation agencies arising from five per cent Ticket Sales Charge/ Cargo Sales (TSC/SCA), the Federal Government has given January 1, 2017 as the deadline for airlines operating in the country to automate their remittance / payment systems forthwith.
Spokesman for the Nigerian Civil Aviation Authority (NCAA), Sam Adurogboye in a statement said the automation system is being introduced to ensure transparency, accurate billing and prompt payments of charges due from the Airlines to the Nigerian Civil Aviation Authority (NCAA) in line with the Nigerian Civil Aviation Regulations(NCARs) 2015, Vol.2, Part 18.12.5.
Quoting from the Nigerian Civil Aviation Regulations (NCARs) 2015, Adurogboye said,“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 manifest, air way bills, load sheets, clients’ service invoices and other documents necessary for accurate billing within forty – eight (48) hours after each flight”.
He stated that it is pertinent to point out that this directive has the full backing of the Federal Government for full implementation and strict compliance, stressing that it is now being handed down after due consultations with the airlines and other stakeholders on the desirability of the operators to join the automation platform for the collection of five per cent TSC/CSC on the airlines operations.
Adurogboye noted that it follows therefore that the airlines are by this directive requested to join the platform on or before January 1, 2017 or face appropriate sanctions in event of failure.
He added that in addition, the operators are further mandated to work with First Bank of Nigeria FBN / AVITECH (FG approved NCAA Consultant on the automation) for the purpose of immediate implementation.
In as much as it is not the plan of the Authority to regulate any airline out of existence,NCAA would no longer be prepared to tolerate non remittance of its dues again as such a conducted would be viewed seriously.
Nigerian airlines are said to be indebted to various aviation agencies like NCAA, the Nigerian Airspace Management Agency (NAMA) and the Federal Airports Authority of Nigeria (FAAN) and others N38b debts.
They also owe banks, aviation fuel marketers’ humungous amount of money in the region of over $800 million. Government also has a large chunk of the blame that has perpetually made the airlines not to be profitable.
Just recently, the government asked to disrupt operations of the debtor airlines for their inability to pay what they owe.
A source alleged that the total debt liabilities of the airlines to NAMA has reached N8.08bn.
According to the source, the N8.08bn covers the period 2001 to June 2016, but some of the airlines involved have gone out of business.
Providing highlights of the debt situation in the industry, the source said:
- Between 2001 and 2013, the en route charges owed the agency was N3.8 billion; and from January 2014 till June 2016, the airline’s debts were N1.6 billion.
• Liquidated airlines, including Bellview, Chanchangi, ADC, and IRS, jointly owed NAMA N1.05 billion;
• Debts owed NAMA from aerodromes by private holders and the States are N1.5billion; and
• The airlines and concessionaires jointly owe the Federal Airports Authority of Nigeria (FAAN) N30 billion.
On the recovery of these debts, the source explained that NAMA has recovered just N329 million.
According to the source, “We’ve been on the debt recovery drive in the past two months,” he stated. “All the agencies started the debts recovery vigorously almost the same time, but some of them have been very recalcitrant, and we will apply the big stick very soon.”
He noted that action started on one of the airlines last week, but that care was exercised not to disrupt passenger operations.
Meanwhile, the balance sheet of the airlines does not suggest that the carriers are healthy. An airline chief once confessed that he is into the business because he does not know how to do any other business.
They are not helped by the skyrocketing price of aviation fuel, high cost of operations, depreciating naira against the dollar, which has done incalculable damage to their operations, high cost of airplane maintenance and alleged heavy charges by various aviation agencies.
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