Airport taxes, charges set to increase, as FG sets up committee to explore ‘revenue opportunities’

[By VICTOR NZE]

Amid complaints of multiple taxation regime, often duplicitous charges, and other sundry charges enforced on airport users across the country, including airlines and airport ground handling firms, the Federal Government has constituted a committee to explore ‘potential opportunities for ramping up the revenue from the facilities.

It is expected that topping the list of these potential opportunities will be the contentious but statutory 5 per cent Ticket Sales Charge and Cargo Sales Charge (TSC/CSC) which has divided regulators and operators in the country’s aviation sector.

The decision to set up the committee was sequel to the facility tour embarked upon, Thursday, at the Murtala Muhammed International Airport (MMIA) terminals, by the Minister of Aviation and Aerospace Development, Mr Festus Keyamo, accompanied by the Permanent Secretary, Mr. Emmanuel Meribole.

The aviation ministry team was conducted round the two domestic terminals of the Lagos airport, as well as the international Wing, in Ikeja, Lagos, by the Managing Director/Chief Executive, Federal Airports Authority of Nigeria (FAAN), Mr. Kabir Mohammed, while also visiting the agency’s Headquarters Annex inside the airport complex.

Mr Keyamo directed the setting up of the committee after taking briefs from the FAAN management, as he observed that ‘there are so many potential opportunities for ramping up the revenue profile of the Agency.’

The committee has four weeks to report back to the Ministry of Aviation is tasked with exploring possible reviews of ‘Advertisement at the Airports; Ticketing System at the FAAN Facilities; Waivers on payment of FAAN Services.’

A statement by FAAN’s Director of Public Affairs & Consumer Protection, Abudullahi Yakubu-Funtua, said the ‘the Committee has been given Four Weeks to come up with a comprehensive report and proffer solution.’

It would be recalled that during his tour of the MMIA, Keyamo had told the airport managers that President Bola Tinubu has mandated the Ministry to generate revenue from the country’s airports.

“Let revenue be coming in through all these spaces here.

“Once anyone is driving into any local airport there should be life. Online advertisement agency has not and cannot take over real life advertisement.

“We have been given mandate to raise revenue for the government. Please, contact the advert agencies so they should put up adverts on all these spaces.

“We cannot have all these spaces and be taking about lack of funds. All details on your findings should be sent to me in seven days,” Keyamo said.

Aviation operators have been under the squeeze of FAAN enforcement of sundry charges and levies, as the latter has continually explained that it is forced to look internally for revenue following its disengagement from federal funding during the Muhammadu Buhari administration.

Many ground handling firms are said to be still behind in the payment and renewal of annual licences to FAAN, a situation which FAAN claims is causing a shortfall in its revenue projections.

This is even as the Airline Operators of Nigeria (AON) has decried the taxation and charges regime of FAAN in the face of dwindling revenue and rising operational costs endured by them.

It would be recalled that in August 2022, Aviation regulatory agencies of the Federal Government have issued an ultimatum to operators of domestic airlines in the country to offset a combined total of N42 billion in debts owed them.

At a meeting of aviation agencies and domestic airline operators convened in Abuja, the regulatory bodies of government, including; Nigerian Civil Aviation Authority (NCAA), Nigerian Airspace Management Agency (NAMA), Federal Airports Authority of Nigeria (FAAN), reeled out their financial demands on the airlines, which they claimed if not settled might see the collapse of the sector.

The meeting in Abuja was also attended by ground handling companies, who form part of the stakeholders’ core.

At the stakeholders’ meeting in Abuja, NCAA claimed to be owed the sum of N19 billion by domestic carriers, representing charges and fees for the statutory 5 per cent Ticket Sales Charge and Cargo Sales Charge (TSC/CSC) which it said had climbed to over N19 billion and $7.8 million over the years.

FAAN said domestic airlines owed it N18 billion for landing and parking charges, while the agency also disclosed of owing NAMA money for terminal and navigational charges.

On its part, NAMA claimed domestic airlines owed it the sum of N5 billion for services rendered to them over the years.

According to the then Director-General, NCAA, Capt Usman Nuhu, if the debts owed the agencies are not offset in the coming few weeks, the aviation agencies may collapse under the burden of the unpaid charges and fees.

Nuhu noted that considering the magnitude of the debts, the domestic operators have been given a one-month ultimatum to sign a Memorandum of Understanding (MoU) with NCAA, which would spell out the repayment plans of their debts to the agency.

“NCAA relies 100 per cent on its Internally Generated Revenue (IGR). The 5 per cent TSC paid by passengers is 85 per cent of NCAA revenue, while the other 15 per cent comes from airlines as payment for services provided and they are all cost recovery. We don’t also impose any excess baggage charge on the airlines. I wonder where the operators saw this.

“The airlines have intentionally refused to pay the debts owed us despite the fact that they have collected such from the passengers. The airlines collect money and refuse to transmute such to the right authorities.

“AON wants us to provide services for free for them. What the airlines are trying to do is to defunct NCAA. You have refused to give us our legitimate money. The fees we are charging the airlines are just cost recovery and we are actually subsidising the airlines,” Nuhu said.

In response, while some of the domestic operators objected to the manner in which the debts issue were raised in the public meeting, instead of discussed behind closed-door, others raised doubts about a purported letter emanating from the Airline Operators of Nigeria (AON) to the Minister of Aviation accusing the agencies of over-taxing them.

Meanwhile, the minister also during his tour of the Lagos airport complex, directed the immediate suspension of the controversial concession arrangement announced by his predecessor, Hadi Sirika, barely days before the May 29 handover date.

This is also as he disclosed that he clarified that a planned expansion is scheduled for the old domestic terminal of the MMIA, as the minister also clarified that he would discuss with owners of private hangers within the space for possible relocation of their hangers in order ‘to give space for the expansion of the new terminal to accommodate bigger aircraft.’

Keyamo further stated that the old terminal should undergo a complete overhaul, he noted that the central cooling system is not working, and a lot of dilapidation needs to be fixed.

He also directed that all airlines in the old terminal should move their check-in counters to the new terminal within three months.

On concession of the airports and Nigeria air project, the Minister said all will be put on hold until he briefs Mr. President on his findings. He stated that as much as he is willing to protect the local airlines, he expects them to be more efficient and effective, noting that issues of flight cancellation and delays will be looked into and laws enforced where necessary.

He also directed the removal of unserviceable aircraft by the owners for the expansion of Apron.

On the new terminal, Keyamo who disclosed that 60 per cent revenue of FAAN comes from the Lagos airport, ‘and as such the new terminal should be used optimally,’ added that the new terminal has 60 check-in points and can accommodate much traffic.