MMIA

FG’s aviation agencies give domestic airlines ultimatum to offset combined N42bn debt

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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.

New terminal of the Murtala Muhammed International Airport (MMIA) in Ikeja, Lagos

At a meeting of aviation agencies and domestic airline operators convened in Abuja, Tuesday, 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.

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

The agencies’ claims come barely days after the Central Bank of Nigeria (CBN) had released the sum of $265 million out of a total $464 million trapped funds belonging to the foreign and domestic airlines operating into or outside of the country.

The funds were allegedly trapped due to a foreign shortage in the country.

A breakdown of the figure indicates that the sum of $230 million was released as a special FX intervention while another sum of $35 million was released through the Retail SMIS auction.

Director, Corporate Communications, Department at the CBN, Mr. Osita Nwanisobi confirmed the release, Friday, as he disclosed that the Governor of CBN, Mr. Godwin Emefiele and his team were concerned about the development and what it portends for the sector and travelers as well as the country in the comity of nations.

Nwanisobi restated that the Apex bank was not against any company repatriating its funds from the country

He added that what the CBN stood for was an orderly exit for those that might be interested in doing so.

This latest development will no doubt bring relief to airline operators, as ,any had either shut down operations or threatened to do so.

The inability of the foreign airlines to remit their funds back home had prompted the House of Representatives to summon the CBN Governor, Mr. Godwin Emefiele, and the Ministers of Finance, Zainab Ahmed and Aviation, Senator Hadi Sirika to a stakeholders meeting.

Air Peace had announced suspending its Johannesburg flight operations over forex shortages, among other reasons, while Emirates Airlines and British Airways had planned suspension of their operations into the country, citing the inability to repatriate their funds.

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 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.

Continuing, Nuhu said: “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.”

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.

It would be recalled that domestic airline operators in the country have been going through a rough patch in their businesses with high cost of aviation fuel (JET-A1) accounting for nearly 70 per cent of operational costs, in addition to a massive drop in passenger volumes, scarcity of foreign exchange for aircraft maintenance, and others.

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