…Ask NCAA Not Function As Federal Govt. Revenue Generating Agency
…Says Ticket Sales Charge imposed passengers not in consonance with dictates of international aviation
The Airline Operators of Nigeria (AON) has stated categorically that all cost recovery
services rendered by the Nigeria Civil Aviation Authority,(NCAA) to domestic airline operators are paid for fully in advance on a cash-before-service basis.
This is just as the AON said that they are not indebted to the regulatory body in any way .
The clarification, AON said is to set the records straight in response to recent media publications credited to the NCAA, which portrayed member airlines as being indebted to the regulatory agency for services rendered to operators.
These publications, AON said are not only misleading but represent a worrisome and unacceptable attempt to use the media to regulate operators outside the established regulatory framework.
The AON condemned this in the strongest possible terms.
”The AON wishes to make it clear that all cost recovery services rendered by the NCAA to domestic airline operators are paid for fully in advance on a cash-before-service basis.
“For clarity, the NCAA issues an invoice for every regulatory service it provides, whether for the validation of crew operating licences, aircraft inspections, documentation renewals, or any other service within its regulatory mandate. Operators are then required to settle all such invoices in advance, and compliance is strictly observed before the NCAA renders any regulatory service.
“In practice, no domestic airline in Nigeria receives NCAA regulatory services without first making the full payment of invoices issued to it by the NCAA. This long-standing policy and procedure remains firmly in place. Consequently, suggestions that domestic airline operators are indebted to the NCAA for regulatory services are factually inaccurate,” the AON said.
Continuing, AON said, “What the NCAA refers to as ‘outstanding charges’ relates solely to the five per cent (5%) Ticket Sales Charge (TSC), a Tax imposed by NCAA on passengers for no services rendered to passengers and not in consonance with the dictates of international aviation. This is entirely different from regulatory service fees.”
The AON also noted that several member airlines maintain dedicated accounts, from which the NCAA draws down its monthly remittances, until the force majure caused by the Iran -Isreal/USA conflict, that had put a lot of financial pressures on airlines worldwide.
Notwithstanding this arrangement, the AON said it had formally appealed to the Federal Government through the office of Minister of Aviation & Aerospace Development, to suspend the payment of all statutory charges temporarily, as an interim measure to assist airlines in managing their cash flows during the current period of severe financial stress caused by the increase in the cost of Jet Al.
The AON stated that as an interim response, President Ahmed Tinubu graciously granted a 30 per cent concession, while waiting for the government decision on the other aspects of the AON intervention request.
The airline body noted that while it acknowledges and appreciates this gesture, it had appealed for a meeting with Mr. President to discuss further reliefs, a request that is yet to be granted.
The AON reiterated its position that the NCAA is a regulatory body, not a revenue-generating agency, adding that the NCAA does not fund any aspect of its businesses or render any direct service to passengers.
It further explained that each and every service NCAA provides to airline operators are fully paid for in advance before such is rendered.
In view of the above, the AON has called on the Federal Government to urgently amend the Civil Aviation Act to empower the NCAA to collect whatever appropriate fees and charges are due it directly from passengers or whoever else, without routing such through the domestic airlines.
“We request this to take effect from June 1, 2026,” AON said.
This, amendment if carried out will relieve domestic airlines of the financial burden of acting as collection agents for the NCAA, since airlines currently bear banking transfer charges and other transaction costs in the process of transmitting funds to the NCAA.
“The 5% Ticket Service Charge in question was introduced over 45 years ago under the Government of General Gowon by the then Federal Civil Aviation Authority (FCAA) and its continued relevance has not been reviewed ever since.
“The FCAA was at the time an arm of the Civil Aviation Department (CAD), housed in Marina under the Ministry of Transportation. As the CAD was not a ministry-level aviation unit, it had limited budgetary resources,” AON recalled.
The Gowon regime of the 1970s had built airports in all 12 States of the federation and these airports required maintenance and operational budgets that were not provided for in the sector’s budget hence the introduction of the 5 per cent TSC.
AON informed that notably, Nigeria Airways, the only domestic airline operating at the time, did not pay the 5 per cent TSC, adding that only foreign airline carriers were required to pay.
AON contended that importantly and worthy of note is the fact that the FCAA has since over time evolved into the NCAA, NAA, and NIMET while NAA in turn evolved into the present-day FAAN and NAMA.
Meanwhile, the aviation industry was deregulated in 1982, allowing for indigenous entrepreneurs to compete in the market, resulting in the new entrant private airlines that have remained the mainstay of the industry and the backbone of the Nigerian economic renaissance.
It added that with the creation of each of these agencies, separate taxes, fees, charges, and levies were introduced for the Nigerian Airline operators to cover their respective services.
AON said that the 5 per cent TSC, which was originally a policy instrument was surreptitiously introduced into the legislation by the NCAA, despite the vehement opposition from the AON and other industry stakeholders.
Domestic airlines, in addition to this 5 per cent TSC, still pay separately ànd directly for services provided by the various industry agencies, including the NCAA itself.
According to AON, “It is important to note that the 5% TSC is an ad valorem tax applied to an airline’s gross earnings, not profits. The global aviation industry operates at a profit margin of between 1.5 per cent and 2.5 per cent at best.
International standard and best practice, AON said provides that aviation should be a cost recovery sector of strategic importance.
aTicket Sales Charge (TSC), a Tax imposed by NCAA on passengers for no services rendered to passengers and not in consonance with the dictates of international aviation. cost-recovery sector of strategic importance. In Nigeria, however, the industry is being subjected to unsustainable financial pressures, in the guise of imposed taxes, fees, charges and levies.
The AON said that it is using this occasion to once again draw the attention of the Federal Government to the unsustainable burden of these multiple taxes, fees, charges and levies arbitrarily imposed on domestic airline operators.
“We make payments to the Nigerian Airspace Management Agency (NAMA), the Federal Airports Authority of Nigeria (FAAN), and several other service providers and statutory bodies.
“The financial impact of these taxes, fees, charges and levies is adverse, burdensome and excruciating, especially at this precarious period, when the entire world has been exposed to the exogenous shocks of the Iran – Israel / USA crisis.
”The aviation sector is crucial to the economy as a catalyst and enabler for economic growth, the survival of the sector therefore demands urgent and deliberate policy action,” AON said.
The AON reiterated that it remain committed to constructive engagement with the government and all stakeholders to achieve a growth-oriented sector, designed to enable the accelerated growth of key sectors of the economy and the improvement and sustenance of a healthy quality of life for the citizenry.
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