NCAA insists on automation as airlines’ indebtedness hits N15bn

The Nigerian Civil Aviation Authority (NCAA) on Tuesday says there is no going back on its earlier directive on automation of remittance of the 5 percent ticket and cargo sales charges.

According to the agency a statement by Sam Adurogboye, General Manager, Public Relations, insisted that any airline that fails to comply will be viewed seriously by NCAA.

The statement reads, “For the purpose of clarity, the Regulatory Authority wishes to state that the 5% 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 have not been so.

There is no ambiguity with regard to the components of the billing of the charges, Part 18.12.4. of the Nigeria Civil Aviation Regulations (Nig.CARs 2015) clearly provides that “the 5% 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 or any other tax that may be imposed by government from time to time.”

Therefore for the avoidance of doubt, 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.”

In realisation of this, the Federal Government of Nigeria had approved the introduction of Aviation Revenue Automation Project (ARAP) for revenue collection to aid data integrity, transparency, transaction accountability, controls and revenue assurance to the authority in 2011.This is at no cost to the operators.

To facilitate easy and seamless remittance therefore, Part 18.12.6. says “all Nigerian licensed airlines shall join the IATA/BSP for the purpose of remittance of 5% sales charges, and shall execute a contract to that effect.”

However, the domestic airlines have not joined the International Air Transport Association/Billing Settlement Plan (IATA/BSP).Therefore; the Aviation Revenue Automation Projects (ARAP) 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 Standard and Recommended Practices (SARPs).This can only be derived from the 5% ticket and cargo sales charges statutorily.

This directive to automate covers both domestic and foreign airlines. However; the foreign airlines have complied fully by remitting their collections through the IATA/BSP.

On the call for review, this is definitely out of the purview of the airlines. Any review should be at the behest of the NCAA using Part 18.12.3. which states “the Authority may review the 5% air ticket, contract, charter and cargo sales charge from time to time in consultation with stakeholders.”

We therefore wish to state that despite the astronomical cost of operation the Authority has never carried out a review since inception. This is to encourage sustained and increased patronage for the air transport industry.

It will be recalled that the decision to collect the charges was a suggestion by the airlines operators in 2001. It was unanimously adopted, agreement signed by all parties after series of meetings and exchange of correspondences and was subsequently enshrined in all the subsisting regulations.

The Airline operators need be aware that the Authority is looking into all the issues raised in their letter.

“Nigerian Civil Aviation Authority (NCAA) therefore wishes to advise the Airline Operators of Nigeria (AON) to ensure adequate compliance with the automation and remit their collection as appropriate.”