Airlines’ Debts to NCAA Rise to N15bn

Agency insists on automation of payment system
Chinedu Eze
The Nigerian Civil Aviation Authority (NCAA) has said the debts owed it by domestic airlines have risen to over N15 billion.

To stop the accrual of further debts, the authority has insisted that airlines must embrace the Aviation Revenue Automation Project (ARAP), which would automatically remit the five per cent ticket and cargo sales charges (TSC) to the coffers of the agency.

The domestic carriers through the Airline Operators of Nigeria (AON) had urged NCAA to suspend the automation of the payment system until the parameters for the deduction of the charges are clarified.

NCAA in a statement signed by its spokesman, Sam Adurogboye, said yesterday that there was no going back on the automation of the remittances by the airlines.

“NCAA has stated unequivocally that there is no going back on its earlier directive on automation of remittance of the five per cent ticket and cargo sales charges.

Therefore, any airline that fails to comply will be viewed seriously by NCAA. For the purpose of clarity, the regulatory authority wishes to state that the five per cent ticket and cargo sales charges are revenue accruable to the aviation agencies through NCAA. This is contained in Part V Section 12(1) of the Civil Aviation Act 2006.
This section merely mandates the Airlines to collect the charges paid by the passengers on behalf of NCAA and remit same appropriately and in real time which has not been so,” the agency said.

The authority said there was no ambiguity with regards to the components of the billing of the charges, noting that part 18.12.4. of the Nigeria Civil Aviation Regulations (Nig.CARs 2015) clearly provides that “the five percent air ticket sales charge shall be based on the total cost of travel paid by passengers to the airline. This shall be the cost of ticket inclusive of fuel surcharge or any other charge added to the total cost of travel by the airline exclusive of government value added tax (VAT) or any other tax that may be imposed by government from time to time.”

For the avoidance of doubt, NCAA urged that all airline operators should be guided by Part 18.12.5.which says, “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 manifests, air waybills, load sheets, clients’ service invoices and other documents necessary for accurate billing within 48 hours after each flight.”

NCAA noted that in realisation of this, the federal government approved the introduction of ARAP for revenue collection to aid data integrity, transparency, transaction accountability, controls and revenue assurance to the authority in 2011 at no cost to the operators.

“To facilitate easy and seamless remittance; therefore, part 18.12.6. said, ‘all Nigerian licensed airlines shall join the IATA/BSP (International Air transport Association/ Billings and Settlement Plan) for the purpose of remittance of 5 percent sales charges, and shall execute a contract to that effect.’”
It, however, explained that as domestic airlines have not joined the IATA/BSP, “the Aviation Revenue Automation Projects is an alternate means of compliance to smooth remittance provided by the Authority in line with Federal Government’s directive.”

“It is pertinent to point out that NCAA is an autonomous regulatory agency therefore it continues to remain solvent by cost recovery in line with ICAO (the International Civil Aviation Organisation)Standard and Recommended Practices (SARPs).This can only be derived from the 5 percent ticket and cargo sales charges statutorily,” adding that the directive to automate covered both domestic and foreign airlines, but the foreign airlines have complied fully by remitting their collections through the IATA/BSP.