NASS Bill Proposing 16% Slash to NCAA Revenue Sparks Industry Row

A bill is currently before the National Assembly seeking to reduce the Nigeria Civil Aviation Authority’s share of the 5% Ticket Sales Charge from 56% to 40%, while increasing NAMA’s share from 22% to 40%.

This has incurred the wrath of the in-house unions made up of the National Association of Aircraft Pilots and Engineers (NAAPE), NCAA Branch and the National Association of Aircraft Pilots and Engineers (NAAPE) NCAA Branch.

What makes the current proposal especially troubling to them is that the NCAA is already operating under severe financial pressure.

The unions took a holistic look at the lingering revenue-sharing formula controversy and concluded that one of the real issues confronting the sector is not simply how the existing 5% Ticket Sales Charge is shared, but the persistent backlog of unremitted charges owed by airlines.

For this reason, one of the more sustainable policy responses, they said, would be to aggressively recover outstanding airline indebtedness and strengthen enforcement mechanisms to ensure the prompt and full remittance of Ticket Sales Charges going forward. Recovering these outstanding debts would provide much-needed relief to all beneficiary agencies without undermining the financial autonomy of Nigeria’s primary safety regulator.

Indeed, given the enormous increase in the NCAA’s regulatory responsibilities, the rising cost of safety oversight, inflation, technological advancement and the Authority’s current financial realities, the conversation should not be about reducing the NCAA’s statutory allocation. If anything, there is now a compelling case for increasing its share to approximately 65% to preserve Nigeria’s hard-earned aviation safety record.

Chairman, NAAPE, NCAA Branch, Diepreye Stephen Saburugha and Secretary, NAAPE, NCAA Branch, Celestine Nkemakolam Chukwu, in a joint statement, stated that the failure by many operators to fully remit Ticket Sales Charges collected from passengers has significantly weakened the revenue pool available for distribution to all beneficiary agencies.

This, they said, has created financial pressure across the board, affecting the NCAA, the Nigerian Airspace Management Agency (NAMA), the Nigerian College of Aviation Technology (NCAT), the Nigerian Meteorological Agency (NiMet), and the Nigeria Safety Investigation Bureau (NSIB).

“This is not speculation. It is a reality that is well known throughout the aviation industry. The Authority is increasingly finding it difficult to adequately fund critical safety oversight activities. Important inspections and surveillance programmes have become constrained by limited resources. Inspectors are owed substantial Duty Tour Allowances arising from official oversight assignments.

“Various staff allowances have been reduced or discontinued, while months of legitimate entitlements remain outstanding because available funds are no longer sufficient to meet both operational requirements and personnel obligations”.

They said, “To some, this may appear to be a routine redistribution of revenue among aviation agencies. It is not. It is a policy decision with potentially serious implications for aviation safety, regulatory independence, and Nigeria’s international standing.”

“What makes the present proposal even more disturbing is that this debate is being approached from the wrong direction. A proper historical review of the 5% Ticket Sales Charge reveals that the real issue is not merely the sharing formula, but the original purpose for which the charge was created, the philosophy upon which it was allocated and the persistent failure to ensure full remittance by operators.”

The historical record is clear, disclosing that the report of the Implementation Committee on the Establishment of the NCAA and NAMA, published in May 1999 under the chairmanship of Engr. I. Mamman deliberately established two different funding models for the two organisations.

They further stated that the NCAA was conceived as Nigeria’s independent safety and economic regulator, responsible for protecting the travelling public by overseeing the entire civil aviation industry.

“Because safety oversight is a sovereign responsibility that generates little commercial revenue but demands enormous financial investment, the Committee recognised that the Authority would ordinarily require Government funding. To relieve the Government of that burden while guaranteeing the financial autonomy necessary for effective safety oversight, the 5% Ticket Sales Charge and Cargo Sales Charge were introduced as sustainable industry-funded mechanisms for financing the NCAA.”

“NAMA, on the other hand, was deliberately conceived as a commercial air navigation service provider that would progressively become self-funding through the statutory charges payable for the air navigation and related services it provides to aircraft operators. Indeed, NAMA itself was carved out of the former Federal Airports Authority of Nigeria (FAAN), which previously performed those functions.

“Today, FAAN remains a self-financing agency and receives no allocation whatsoever from the 5% Ticket Sales Charge. That was the same financial philosophy upon which NAMA was established. The initial allocation made to NAMA from the Ticket Sales Charge was therefore intended to facilitate its establishment and transition into a financially self-sustaining organisation, not to permanently supplement a service provider that already possesses substantial statutory revenue streams under its enabling Act.”

They reasoned that the NCAA is far more than an administrative agency issuing approvals and paperwork, describing it as Nigeria’s principal aviation safety regulator with Its inspectors certifying airlines before they commence operations, approve maintenance organisations, inspect aircraft, audit flight operations, approve maintenance programmes, evaluate Approved Training Organisations, oversee licensing systems, investigate safety concerns, certify aerodromes, oversee Air Navigation Service providers, monitor Continuing Airworthiness Management Organisations and enforce compliance with the Nigerian Civil Aviation Regulations.

To them, in simple terms, the NCAA is the critical barrier between safe and unsafe operations, underscoring that the depth of this financial crisis becomes even clearer when one considers the authority’s human capital.

They noted that in the last five years alone, the NCAA has lost more than sixty inspectors and other highly specialised technical personnel through attrition, largely because of poor remuneration and more attractive opportunities elsewhere.

“Over many years, the authority invested enormous public resources in training these professionals locally and internationally, only to lose them to foreign civil aviation authorities, airlines, maintenance organisations, aircraft manufacturers and consulting firms offering significantly better conditions of service. This continuing brain drain represents a serious erosion of institutional knowledge and technical capacity for a regulator whose effectiveness depends almost entirely on the competence and experience of its technical workforce”, they added.

Wole Shadare