The Nigerian Civil Aviation Authority (NCAA) has disclosed plans to ground airlines that are indebted or defaulting in debt payment agreement reached with the regulators and service providers.
The apex regulator, following a storming session with the operators recently, said the aviation agencies would no longer indulge airlines to amass debt.
Hence, it has introduced a prompt payment system, which will also deny debtors a renewal of Air Operator Certificate (AOC) and Air Transport Licence (ATL).
The NCAA had accused the operators of deliberately stifling regulators and service providers of funds, by withholding statutory five per cent Ticket Sales Charge and Cargo Sales Charge (TSC/CSC) to the tune of over N19 billion and $7.8 million (N3.29 billion).
The airlines are also indebted to the Federal Airports Authority of Nigeria (FAAN) and the Nigerian Airspace Management Agency (NAMA) to the tune of N18 billion and N5 billion, in that order. The airlines owe FAAN landing and parking charges, while they are also hugely indebted to NAMA in terminal and navigational charges.
Director General of the NCAA, Capt. Musa Nuhu, told reporters that industry challenges cut across the board, including the regulators and service providers.
“Even in the agencies, we have the same problem of funding. At a point in time during the COVID-19 pandemic when the airlines ran into trouble, a lot of the agencies too had the same challenges of paying salaries. You can imagine FAAN running about 27 airports and the funds are not there. NAMA has facilities all over the country that they must maintain. Equipment is imported and they must be maintained. Yet, we need to stabilise the system and ensure there is improvement.
“So, we are working with the airlines on the issue of outstanding funds. We know that if we tell them to give us all these monies at the same time, it is very difficult and not possible. So, at the NCAA, we have put in place a tripartite agreement, involving the NCAA, airlines and the airlines’ banks.
“Once those funds go to the bank, the five per cent TSA/CSC is automatically deducted and goes into the NCAA bank account, and NCAA will share it with the other sister agencies on a predetermined ratio as entrenched in the 2006 Civil Aviation Act,” he said.
On the legacy debts, Nuhu explained that the Memorandum of Understanding (MoU) with each debtor airline, on repayment plan, holds.
“I almost think all the airlines are complying with this, except a few that we are working on. What we have said is that if they don’t pay this legacy debt, we are not going to renew their licenses – AOC and ATL.
“That is one of the conditions and most of them have entered into the agreement. My account people are sitting with them so that they can make an arrangement on payment of a reasonable amount so that the debts can be cleared off over a short or middle time period.”
He acknowledged that some of the local carriers are in financial mess and in need of fresh capital. The DG noted that financial distress in aviation, if not managed properly, could snowball into safety issues.
“Those with financial difficulties, if you notice, are delaying and cancelling flights, but we need to work with them. We are all in this together, except where we have serious concerns in the continued existence of the airlines or serious violation. We will work together so that they will be able to get out of these financial challenges that they found themselves in,” Nuhu said.