NCAA, experts clash over 5% air ticket charge

By Dickson Omobola

Stakeholders in the country’s aviation sector have deepened calls for a review of the sharing formula of the five per cent Ticket Sales Charge/Cargo Sales Charge, TSC/CSC, saying the Nigerian Airspace Management Agency, NAMA, required a larger share of the revenue to upgrade air navigation infrastructure.

This development comes as the NCAA expressed fears over the issue and warned that any reduction in its statutory allocation could weaken aviation safety oversight and regulatory effectiveness.

Addressing newsmen in Abuja recently, Director of Public Affairs and Consumer Protection at the NCAA, Michael Achimugu, said while NAMA was established as a self-sustaining agency, the NCAA relied largely on the TSC to fund its statutory regulatory functions.

Meanwhile, under the revenue sharing formula contained in the Nigeria Civil Aviation Act, 2022, proceeds from the five per cent TSC/CSC collected on passenger tickets and cargo are distributed among the NCAA, which receives 56 per cent; NAMA 22 per cent; the Nigerian Meteorological Agency, NiMet, nine per cent; Nigerian College of Aviation Technology, NCAT, seven per cent; and the Nigerian Safety Investigation Bureau, NSIB, six per cent.

However, a bill currently before the National Assembly, which has passed second reading, seeks to amend the sharing formula by reducing the NCAA’s allocation from 56 per cent to 40 per cent, while increasing NAMA’s share from 22 per cent to 40 per cent.

In separate conversations with Vanguard weekend, aviation experts backed the proposed amendment, saying the current formula was not a reflection of the critical infrastructure responsibilities shouldered by NAMA.

Leading the charge is think-tank aviation group, Aviation Safety Round Table Initiative, ASRTI/ART, whose President, Air Commodore Ademola Onitiju, retd, said increasing NAMA’s allocation was justified, given the agency’s responsibility for providing aeronautical and air navigation services.

He said: “It is alright, especially because of the aeronautical and navigational services NAMA provides. If the bill is seeking to reduce the NCAA’s share from 56 per cent to 40 per cent and NAMA’s allocation from 22 per cent to 40 per cent, then it is okay. The NCAA regulates safety and security of the aviation sector and ensures the maintenance of standards. 

“Aviation in Nigeria is better off if we equip those that discharge those critical functions that also make NCAA relevant. NAMA’s infrastructure and equipment that would ensure the safe management of Nigerian airspace are crucial. 

‘’It’s not just for the Nigerian airspace, but even to the international community too. The overall safety of air travel in Nigeria is enhanced when there is state-of-the-art equipment.”

Onitiju, however, urged government to provide additional funding for the NCAA because the authority carried out Nigeria’s obligations under the International Civil Aviation Organisation, ICAO.

On his part, aviation safety and security expert, Group Captain John Ojikutu, retd, also faulted the existing revenue-sharing formula, saying it was inequitable.

He said: “In each of the airports, there are a minimum of three navigational and aerodrome approach equipment. Equipment such as the Instrument Landing System, ILS, radar and the Very High Frequency Omnidirectional Range, VOR, must be calibrated at least twice a year. 

‘’Some of these systems cannot be calibrated locally, so experts have to be brought in from abroad and paid in foreign currency.

“I raised this issue with the National Assembly as far back as 2022 because the formula is wrong.  What is the rationale for allocating only 22 per cent to NAMA? It is the only agency providing aeronautical services, yet it receives far less than the NCAA, which is essentially a regulatory inspector. The NCAA’s share should be reduced to 40 per cent.”

However, former Managing Director of NAMA, now Trustee Member of the Airline Operators of Nigeria, AON, Mr Roland Iyayi, has faulted the five per cent TSC, saying it was unsustainable for domestic carriers.

He described it as a sham that had long defeated the purpose for which it was introduced, which was to develop aviation infrastructure, and proposed replacing it with an Aviation Development Fund that would be insulated from government revenue accounts and dedicated to infrastructure projects within the sector.

He said: “The five per cent TSC is useful, but not for the purpose for which it is currently being used. What it was intended for and what it is being used for today are two different things. It was intended for aviation development. 

‘’Yet aviation has remained in deficit for the past four or five decades because those funds have consistently been diverted to purposes outside aviation.”

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