NCAA admits revenue drop, says ‘finances in trouble’

Nigerian Civil Aviation Authority (NCAA) has recorded over 40 per cent drop in its revenue due to the Coronavirus disease (Covid-19) pandemic in the country, in the same way as the agency has suffered a 100 per cent increase in running and operating cost.

Director–General, NCAA, Nuhu Musa (left) with Chairman, Senate Committee on Aviation, Sen. Smart Adeyemi during the Committee’s oversight visit to the agency, Tuesday

This much was disclosed by the Director General NCAA, Captain Nuhu Musa, while receiving members of the Senate Committee on Aviation at the Regional Headquarters of the regulatory body, in Abuja, Tuesday.

According to the NCAA chief, the financial status of the NCAA has been in red in the past one year as a result of the negative impact of the Covid-19 on its operations which has also hampered debt recovery moves.

The agency also complained to the Aviation Committee members that its service charges are not at par with its contemporaries in the region, adding that what it charges for Air Operators Certificate in Nigeria is $500 about N200, 000 which cannot send its inspectors for training while in Gambia, the charge is $200, 000.

Musa said it has become stressing that over the years the devaluation of Naira, inflation in the country has affected the industry adversely and that the COVID-19 crushed all hope to improve the industry’s contribution to the GDP.

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“One of our main challenges of the COVID-19 is the loss of revenue, from December 2019 to November 2020, we’ve had about approximately 40% drop in revenue because flights were not coming in which is a significant part of our income as the 5% Ticket Sales and Cargo Sales Charges. Out of this revenue we are required to pay 25% to the consolidated account which now we have been told is 50%.

“We are not doing cost recovery; we are actually operating at a loss. Let me give you an example, in Nigeria to get is an Air Operating Certificate (AOC) which is a licensing for running airline is N200, 000 that is $500 but in Gambia it is $200,000 when we charge $500 dollars. It cannot pay the cost of my inspectors to buy tickets and go for training.

“So we are in a very tight situation and tight corner and things are not easy. We need help from the national assembly, we are doing our best but the numbers don’t add up. “

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Captain Nuhu while explaining the advantages of regional offices and level standards also told the Senate Committee that due to activities, that Murtala Muhammed Airport still remains the regional hub in Nigeria and movement to Abuja helps decentralize the agencies activities.

He also said that the creation of multiple regional offices across the country will be cost effective, save airlines and agency time and provide equal services everywhere not just concentrate on Lagos and Abuja.

“Aviation activities in each regional office, we will carry the number of staff and the kind of tools and equipment they will need and the whole idea is so that each regional office has adequate staffing requirement, adequate tools; adequate offices, and everything to effectively and efficiently and comfortably deal with all field activities which includes mostly surveillance and enforcement.

“So obviously by that formula Lagos is the main hub in Nigeria and certainly Lagos will take a significant percentage, over 50% of the resources, I’m saying that but the committee will come up with it but the point Lagos will take the significant part of the resources because this is where the hub of the aviation industry is. So when we say we are moving to Abuja, it’s not like we are carrying everybody to Abuja.

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“We want to decentralize certain functions and certain authorizations to regional offices so you don’t have to go to the main headquarters for everything, up to certain level you’d get some good services in the regional offices that would reduce the cost but for the airlines and reduce the inconvenience of having to go to Lagos or Abuja and also for us its easier when we have regional offices,. The inspectors for us can go and do their jobs instead of paying air fare from Lagos to Abuja and different corners of the country. In addition to better surveillance at the long run, it is more cost effective for us.”

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